Despite a drop in international costs fuel remains expensive. Even if the price of oil on the international market has dropped, Nepal Oil Corporation maintains its high prices.
Inflation-stricken consumers say that every time interest rates on the foreign market rise, but the state-owned oil monopoly does not respond as quickly when it is the other way around.
Nepal Oil Corporation claims it cannot reduce rates due to significant losses, while insiders say it is profitable for the first time in 20 months.
Fuel prices have contributed to the misery of Nepalis already suffering from severe inflation.
There is considerable public outrage that, despite lowering global pricing over the last two months, this has not been reflected in the home market.
The government corporation has stated that prices may not be reduced due to its negative balance sheet, and that if prices are reduced, the supply system may be interrupted.
Because of a drop in crude prices in August and September, Nepal Oil Corporation is now making a monthly profit of Rs790.87 million.
According to worldwide media estimates, Brent crude oil averaged $86.27 per barrel in September before rising to $91.63 in mid-October.
In its most recent report, the International Monetary Fund (IMF) stated that as the cost of living continues to climb, authorities around the world will need to safeguard society’s most vulnerable people from the impact of higher costs.
Poorer households frequently spend more than others on food, heating, and fuel, all of which have experienced particularly sharp price rises.
Furthermore, households cannot readily change consumption to reduce spending on these products; everyone must eat and use heating, and transportation (the price of which is sometimes dictated entirely by fuel expenses) is frequently required to get to work, according to the paper.
However, any increase in new spending should be offset by efforts to prevent the inflationary impact.
According to the IMF research, governments in countries lacking well-developed safety nets should aim to expand any existing programs.
While Nepal’s caretaker government is unable to make critical choices ahead of the November 20 elections, Nepal Oil Corporation is steadfast in its refusal to reduce fuel prices due to the country’s mounting debt. It claims that its current outstanding debts total more than Rs43 billion. Despite a drop in international costs fuel remains expensive.
