Government's Two-Day Holiday Policy Fails to Curb Fuel Consumption

Kathmandu. Despite the government's decision to implement a two-day public holiday to reduce fuel consumption amidst rising prices, the policy has shown little impact. Data from the Department of Customs indicates that the government's strategy has been largely ineffective, with diesel consumption actually increasing this month.

According to the department's data, the total volume of diesel imports reached 1,035,033 kiloliters by Chaitra of the current fiscal year. This figure stood at 896,448 kiloliters up until the month of Falgun.

Calculations show that 138,585 kiloliters were consumed in the month of Chaitra alone, whereas the average monthly consumption of diesel up to Falgun was 112,056 kiloliters. Instead of declining, the rate has increased in Chaitra.

During this period, expenditure on diesel has more than doubled. While the total cost for diesel consumption was 10.21 billion rupees up to Falgun, it has now surged to 21.20 billion rupees.

However, the demand for petrol has seen a slight decline. The average monthly growth rate of petrol consumption, which was approximately 63,988 kiloliters until Falgun, was limited to 56,459 kiloliters in Chaitra.

Nevertheless, due to price hikes, expenditure on petrol, which previously averaged 5.48 billion rupees per month, reached 6.49 billion rupees in Chaitra alone.

While petrol consumption appears to have stabilized, the impact of price hikes is more evident than the government's holiday policy. Since petrol is used for personal purposes, demand drops as soon as prices rise. Conversely, diesel is used for commercial purposes, so demand generally does not decrease.

Although fuel consumption has not declined, the government has not suffered significant losses. As the volume of fuel imports increases, the import revenue collected by the government has also grown. According to the data, in the month of Chaitra, 42,519,231 rupees in revenue was collected from diesel imports alone, and 32,310,596 rupees from petrol.

Currently, the government faces a loss of 99 rupees and 16 paisa per liter on diesel, while there is no significant loss on petrol. Although the two-day public holiday was expected to reduce the use of public and private transport, the rising demand for diesel in construction and industrial activities has prevented an overall decline in consumption.