KATHMANDU, Jan 2: Nepal Oil Corporation (NOC) has increased the prices of petroleum products again in less than half month.
The sole importer and supplier of petroleum products in the country decided to raise the price of petrol, diesel and kerosene by Rs 2 per liter each. The revised prices will come into effect from Wednesday midnight, according to the NOC.
With the fresh revision, petrol will now cost Rs 111 per liter while diesel/kerosene will retail at Rs 100 per liter in Kathmandu. The price of petroleum products in places close to Nepal-India border areas will be slightly lower compared to the prices in Kathmandu valley.
Soaring fuel prices (with video)
On December 17, the NOC had raised the price of diesel and kerosene by one rupee per liter each, while keeping the petrol price unchanged. But on December 2, the prices of petrol, diesel and kerosene were hiked by Rs 2 per liter each.
NOC officials say that the price has been revised upward as per the automatic price mechanism put in place four years ago.
“As the price of the petroleum products received from the Indian Oil Corporation (IOC) on January 1 has slightly increased in line with the price in international market, the price has been revised as per the Working Procedure on the Automatic Price Mechanism for Petroleum Products,” said NOC Spokesperson Birendra Goit.
After lowering the price by Rs 2 per liter on September 10 after the formal launch of the India-Nepal cross border petroleum pipeline (Motihari-Amlekhgunj), the NOC has already raised the price of petrol by Rs 4 per liter.
The increasing price of petroleum products is likely to put further pressure on inflation which has already overshot the government's annual average target.
According to the data of the Nepal Rastra Bank, average inflation stood at 6.27% in the first four months of the current fiscal year 2019/20, compared to the government target to contain it below 6%.
If this upward trend continues to drive up transportation costs, inflation is likely to go up further, according to economists.
The rising petroleum prices dash the NRB officials hope that the projected correction of petroleum product prices in the international market will help to keep inflation within the target. In its first quarterly review of the Monetary Policy for the current fiscal year 2019/20, the NRB has said that the 'increase in the domestic production and projected correction of price of petroleum products in the international market will keep the annual average inflation within the targeted limit'.
