Nepal Oil Corporation Faces Severe Financial Crisis Amid Global Fuel Price Surge

Kathmandu. The Nepal Oil Corporation (NOC) is facing a severe financial crisis due to the ongoing war in West Asia and the sharp rise in petroleum prices in the international market. The corporation has issued a public appeal, warning that if fuel consumption is not reduced and prices are not adjusted, it will be unable to make payments to the Indian Oil Corporation (IOC), potentially leading to a fuel shortage in the country.

According to NOC Executive Director Chandika Bhatta, data from March 30 to April 8, 2026, indicates a fortnightly loss of approximately 14 billion rupees, or 930 million rupees daily. Despite the government providing a 50 percent exemption on customs duty and infrastructure tax on 2082/12/24, the impact has been minimal due to the continuous rise in crude oil prices globally.

Due to these compelling circumstances, the NOC increased prices effective from 2082 Chaitra 26, raising petrol by 17 rupees per liter, diesel and kerosene by 25 rupees, LP gas by 100 rupees per cylinder, and aviation fuel by 6 rupees. Even with these hikes, the corporation is projected to face a fortnightly loss of about 8 billion rupees. The NOC paid 26.86 billion rupees to the IOC on April 8 and faces the challenge of managing 16.37 billion rupees for the next installment due on April 23.

Recalling the strict measures taken by neighboring countries like Sri Lanka, Pakistan, and Bangladesh—such as quota systems, odd-even vehicle rules, and online classes—the NOC has urged Nepali consumers to practice austerity. 'Since Nepal is entirely dependent on imported fuel, reducing consumption is the only option at this time,' the appeal stated.

The NOC presented data showing that if every motorcycle rider saves 1 liter and every car driver saves 1 liter of fuel daily, the state could save 260 million rupees per day. This could result in a saving of 3.9 billion rupees over 15 days, and the corporation has earnestly appealed to all stakeholders and consumers to avoid unnecessary vehicle use and exercise extreme caution in fuel consumption.

Appeal from Nepal Oil Corporation Limited

 Greetings. A heartfelt appeal from the corporation to our respected consumers and stakeholders.

 It is known that petroleum prices are continuously rising in the international market due to the ongoing war in the Middle East. In this situation, the inability to adjust prices according to the automatic pricing system has led to an unexpected increase in the corporation's losses and a weakened financial state. As the financial condition deteriorates, there is a high possibility of an interruption in the supply chain due to the inability to pay the Indian Oil Corporation. Considering this critical situation, the Nepal Oil Corporation remains active to ensure the availability of petroleum products and LP gas by managing the distribution system.

 Most recently, on April 3, 2026, despite high losses, the NOC adjusted prices by increasing them by 15 rupees per liter for petrol, diesel, and kerosene. However, as this adjustment was minimal compared to the rise in purchase costs, the corporation was facing a loss of 34.36 rupees per liter for petrol, 120.54 rupees for diesel, and 416.37 rupees per cylinder for LP gas, amounting to a fortnightly loss of 11.71 billion rupees, or about 780 million rupees daily.

 To provide relief to citizens, the Government of Nepal decided on 2082/12/24 to grant a 50 percent exemption on customs and infrastructure development taxes, which reduced the fortnightly loss to about 10.22 billion rupees, or 680 million rupees daily. Since then, international prices have continued to rise.

 Based on the average spot price increase from March 30 to April 8, 2026, the corporation faces a fortnightly loss of about 14 billion rupees, or 930 million rupees daily. Therefore, I would like to request our respected consumers to understand that the corporation has no alternative but to adjust prices for all petroleum products, including LP gas.

 To maintain the supply chain, the NOC paid 26.86 billion rupees to the Indian Oil Corporation on April 8, 2026, using funds from tax exemptions, sales revenue from March 23 to April 7, and the Price Stabilization Fund. With the need to manage 16.37 billion rupees for the next installment on April 23, 2026, a price adjustment became mandatory on 2082 Chaitra 26. Consequently, prices were increased by 17 rupees for petrol, 25 rupees for diesel/kerosene, 100 rupees for LP gas, and 6 rupees for domestic aviation fuel. Even with these adjustments, the corporation still expects a fortnightly loss of about 7.81 billion rupees.

 It is the duty of every responsible citizen to save fuel during this global crisis. Neighboring countries like Bangladesh, Pakistan, Sri Lanka, and others have implemented strict measures such as fuel quotas, odd-even vehicle operations, four-day work weeks, and online classes. Thanks to the clear guidance of the Government of Nepal, the support of stakeholders, and the effective management of the corporation, Nepal's situation remains satisfactory. Therefore, the corporation expects continued cooperation from all consumers and stakeholders to face this fuel crisis.

 As Nepal lacks facilities for the production and refining of petrol, diesel, kerosene, aviation fuel, and LP gas, it is known that we are dependent on other countries. In the current situation, reducing fuel consumption is the only viable option to maintain imports through financial management.

 For this option, if one motorcycle rider saves 1 liter of petrol daily, the state saves about 220 million rupees per day. Similarly, if one car saves 1 liter of petrol/diesel daily, it saves about 40 million rupees, totaling a daily saving of 260 million rupees. Over a 15-day adjustment period, this could save about 3.9 billion rupees, and the corporation earnestly appeals to all consumers to save fuel.

 The Nepal Oil Corporation appeals for continued cooperation from all consumers and stakeholders regarding the difficulties caused by the sudden rise in international prices and requests everyone to practice austerity in the use of petroleum products. Thank you. Greetings.