The government on Thursday tried to appease protesting students by partially rolling back prices of petroleum products.
The revision has brought down price of petrol by Rs 3 per liter, while diesel and kerosene now cost Rs 4 less each per liter. Price of cooking gas has also been reduced by Rs 85 per cylinder.
As per the revised price list, petrol will now cost Rs 112 per liter at all the gas stations in the country. Similarly, diesel and kerosene will cost Rs 81 per liter, and cooking gas will cost Rs 1,415 per cylinder. The new prices will come into effect on Thursday.
“We were forced revise down the prices of petroleum products after consumers, especially students, expressed dissatisfaction over the price hike introduced earlier this month,” Commerce and Supplies Minister Lekh Raj Bhatta told a press meet organized in Kathmandu on Thursday.
The government on Jan 17 had raised the prices of all petroleum products by an average of 11 percent to plug losses of the state-owned Nepal Oil Corporation (NOC).
Following the hike, the state oil import monopoly had started generating a profit of Rs 3.79 on each liter of petrol and Rs 1.73 on every liter of kerosene, while suffering a loss of Rs 12.90 per liter on diesel.
Since diesel accounts for 60 percent of total petroleum product trade in the country and subsidy on it was huge, the profit earned by the state oil company on selected products was not enough to shore up its balance sheet. This generally means the financial health of the loss-making NOC will deteriorate further with the latest price reductions. This has raised fears that the supply of petroleum products will not remain smooth in the days to come and serpentine queues at gas stations will start becoming everyday affair for most of the people.
“To normalize the situation the government must come up with a national policy on import and supply of petroleum products,” minister Bhatta said.