Petroleum products costlier by over 20 percent in last one year

KATHMANDU: Prices of petrol and diesel in Nepal surged more than 20 percent in the past one year with Nepal Oil Corporation (NOC) hiking the fuel prices again on Sunday midnight.

In its new move, NOC has raised the prices of petrol and diesel each by Rs 2 per liter to Rs 120 per liter and Rs 103 per liter,  respectively. Based on the petrol price that stood at Rs 96 per liter a year ago, the price soared by 25 percent. For diesel that costs Rs 85 per liter in April 2020, the price hike is around 22 percent.

If the prices of petroleum products four months ago are taken into account, petrol is expensive by 11 percent while diesel has been dearer by 13 percent. The new prices are probably one of the highest prices of the fuels in the past seven years. According to the NOC record, petrol cost Rs 123 per liter in December, 2014, which gradually declined along with the massive drop in the petroleum prices in the international market.

The rise in the prices of petroleum products largely contributes to an increase in consumer price index (CPI) that measures the country’s inflation rate, shows a research conducted by Nepal Rastra Bank in 2018. “Although petrol price rise has negligible but positive impact on CPI, rise in diesel price has significant positive impact on the CPI,” reads the study report. The soaring price is also likely to make domestic products less competitive causing it to further worsen the trade balance.

Madhav Timilsina, president of Consumer Right Investigation Forum, said the government has to remove the excess taxes being imposed on the petroleum products to relieve general people who have already been suffering due to escalating prices of foods in recent days. 

Republica