Kathmandu runs out of gas, diesel and petrol

Nepal Oil Corporation runs up heavy debt

By Sudharson Thapaliya
Published: Tuesday 07 February 2012

“My wife has asked me to bring home one cylinder of cooking gas, and she has advised me to ask for prime minister’s recommendation for it,” said Laxman Ghimire, chief whip of Nepali Congress during a meeting of the Constitutional Assembly of Nepal recently.

The opposition party leader was not joking. Ghimire was only pointing to the ground truth—the crippling gas shortage in Kathmandu. It is likely that Ghimire will get a gas cylinder because of his political connections. But what about the common citizens?

Nepal's fuel demand
  • 7,000 kl petrol
  • 65,000 kl diesel
  • 6,000 kl kerosene
  • 3,000 kl aviation turbine fuel (ATF, domestic)
  • 7,000 kl ATF (international)
  • 1.2 million cooking gas cylinders
Ram Singh Thapa, a restaurant owner in Kathmandu had to shut his business for three days due to unavailability of cooking gas. “I was ready to pay double the market price but I couldn’t get any cylinder,” he says. “One friend gave me a few litres of kerosene and I am using a kerosene stove as of now, I but can’t say how many days I can manage with this,” says Thapa.

14 hour power cuts

Not only gas, Kathmandu is running short of petrol and diesel, too. Besides, city residents are putting up with 14 hours of load shedding each day.  Signboards saying “No petrol”, “No diesel” and “ Closed for indefinite period” have become a common sight at the fuel stations in Kathmandu. Nonetheless, long queues of vehicles can be seen outside these stations with owners hoping to get a litre or two of petrol or diesel.

Taxi passengers are shelling out large sums of money because of the fuel shortage. “Very few cabs are available as compared to earlier,” says Janice Kashyap, a US citizen who has been in Nepal the past six years. “Even if I get one, the driver asks for double the fare, citing fuel shortage and the  money he would have to pay for petrol,” she adds. People in the transport business say only 50 per cent vehicles are plying.

Hotels and restaurants are also badly hit. Owners of small tea stalls and big hoteliers have the same thing to say—they are out of fuel.
“We are spending almost double the amount spent on fuel (to run generators) because there is load shedding,” says Madhav Om Sherestha, executive director of the Hotel Association of Nepal, an umbrella organisation of the country’s hotel industry. “If this situation continues, we have to think about closing our businesses. I think that day is not far off,” says Sherestha.

India has cut gas supply

The speculations doing the rounds is that the fuel shortage is the fallout of political relations with India. The state-owned Nepal Oil Corporation (NOC) has monopoly over import and distribution of petroleum products, and the Indian Oil Corporation (IOC) is the sole supplier of petroleum products, including cooking gas, to NOC.

NOC officials deny this. “No political interest is involved,” says Mukund Dhungel, spokesperson for NOC. “If we pay on time, they will supply.” He says fuel supplies from India are normal, but that because of load-shedding the demand for diesel, petrol and kerosene have increased, and that this demand is hard to meet. “As for cooking gas, there are some problems on the Indian side. However, we are doing our best to manage it efficiently,” Dhungel adds.

IOC has cut gas supplies to Nepal sharply, citing huge losses in recovery from NOC. Over the past one month, IOC has been supplying just around 300 tonnes gas a day, whereas the normal demand is around 650 tonnes, say NOC sources. Gas bottlers say the LPG shortage will ease only if NOC imports 1,000 tonnes of LPG each day for 15 consecutive days, which is unlikely given the heavy debts already incurred by NOC.

Earlier, in January, the government hiked fuel prices by almost 15 per cent  triggering nationwide protests, led by several student organisations. Subsequently, on February 2, the government rolled back the prices of cooking gas, kerosene and diesel, but not petrol.

It has been weeks since the Nepal is suffering one of the worst energy crises in recent times. NOC says the problem will tide over in a fortnight. How the country meets the continuously growing fuel and electricity demand is something that remains to be seen. 

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