The Government of Nepal implemented a general reduction in fuel prices of up to 17%, in response to the drop in international crude oil prices and improved global supply expectations following progress in negotiations to de-escalate the conflict between Iran and the United States.
The measure was announced by the Nepal Oil Corporation (NOC), the state-owned company responsible for fuel import and distribution in the country, which confirmed downward adjustments in gasoline, diesel, liquefied petroleum gas, and aviation fuel. The new prices took effect immediately.
General Adjustment in Gasoline, Diesel, and Domestic Gas
According to the official statement, NOC reduced the price of gasoline by 9.2%, diesel by 13.3%, and domestic gas by 4.6%. In the aviation segment, the reductions were even more significant, with a decrease of 14.8% for domestic flights and reductions ranging between 14.47% and 17.04% for international operations, depending on the airport of origin.
The adjustments reflect the recent behavior of international energy markets, where oil prices have retreated from recent highs. This movement responds to the reduction of supply disruption risks from the Middle East, particularly following signs of stabilization around peace negotiations between the United States and Iran and the possible normalization of crude oil flow through the Strait of Hormuz, an essential point for global energy trade.
Nepal, a Market Completely Dependent on Imports
Nepal maintains total dependence on imports to meet its domestic fuel demand. The country, located between India and China, does not have significant domestic hydrocarbon production, making it a market highly exposed to international oil volatility.
The Nepal Oil Corporation depends exclusively on supplies from Indian Oil Corporation (IOC), which acts as the sole external supplier of refined fuels. According to the state-owned entity, the recent price adjustments respond directly to the reduction in supply costs reported by IOC in the latest commercial update.
From Inflationary Pressure to Tariff Adjustment
In previous months, Nepal had increased fuel prices in April and implemented restrictions on domestic gas consumption in March, due to supply chain disruptions associated with geopolitical instability in the Middle East.
The change in trend in international prices has allowed for partial reversal of these measures, relieving pressure on consumers and reducing the inflationary impact in a country where transportation and imported energy have significant weight in the domestic economy.
Source: https://www.reuters.com/
Photo: Shutterstock
