Aviation fuel up 12pc
Other fuel hikes likely to follow

BY MILAN MANI SHARMA

KATHMANDU, June 5 - The government has raised the price of aviation fuel by about 12 percent and also geared up consultations to raise the price of other petroleum products.

Nepal Oil Corporation (NOC) Wednesday announced that the price of aviation fuel for domestic airlines has been increased to Rs 100 per liter from Rs 90 from Thursday. "Price for supply to international flights has been raised to US$ 1,500 per kiloliter from US$ 1,330," said a source.

The source informed the Post that the government was also discussing raising the price of other petroleum products at a 13-party meeting soon.

A decision in this connection was taken after Maoist ministers in the cabinet said today that the Maoists will agree to hike fuel prices if the13 parties, which are in the constituent assembly, also gave their nod.

The cabinet meeting held today expressed serious concern over rising oil losses, which are estimated to touch Rs 2.70 billion in June, and assigned its financial committee to make recommendations on ways to solve the long-running fuel crisis.

Finance Minister Dr Ram Sharan Mahat stated that the government was now serious about adjusting the oil prices.

"We avoided adjustment of domestic rates for long. Now the problem threatens to gobble up the economy. We cannot defer a decision now," he said at a function.

Dr Mahat also indicated that the rise would not be to the extent to which import prices have risen, mainly for kerosene and diesel. "Import prices have gone up so high, the state will have to subsidize imports even after the hike," he said.

At existing retail prices, Nepal is incurring losses of about Rs 20 per liter of petrol, Rs 44 per liter diesel, Rs 36 kerosene and Rs 380 per cylinder of cooking gas.

The import-sales price gap has already inflicted on the country a loss of about Rs 6 billion in the first 10 months of 2007/08. During that period, the government gave NOC Rs 5.65 billion in loans to finance imports.

Meanwhile, in a bid to manage supplies, NOC has capped the per customer petrol supply to 4 liters for bikes and 12 liters for public and private cars and taxis at one filling. Likewise, it has limited the diesel supply for school buses to 15 liters and for passenger buses and goods carriers to 12 liters.

For buses plying long and medium routes, the supply has been limited to 80 liters and 50 liters respectively. Micro and mini buses plying outside the Valley would get 15 liters and long-haul goods carriers 50 liters at one filling.

Posted on: 2008-06-04