The common people's kitchen has become expensive as the state oil monopoly has increased petroleum prices including cooking gas that will be dearer by Rs 175 per cylinder to Rs 1,500, putting extra burden on household budgets.
Nepal Oil corporation (NOC) has — in the sharpest ever one-time increase — hiked prices of petrol by Rs 10, diesel and kerosene by Rs 9 and domestic aviation fuel by Rs 5 per litre.
Petrol will now cost Rs 115 per litre, diesel and kerosene Rs 85 and domestic aviation avitation fuel Rs 105. But according to Nepal Petroleum Dealers National Association, the Valleyeits will have to pay Rs 115.70 for a litre of petrol.
The NOC had also hiked price of petrol, diesel and kerosene three months ago to Rs 105 for a litre of petrol and Rs 76 for a litre of diesel and kerosene, citing the huge loss by the corporation due to rising international oil prices.
However, the price hike in petroleum products will push transportation costs up having a cascading effect on food prices and other commodities related to everyday lives. he price hike will fuel up to 10 per cent inflation in an average. The fare of public vehicle will go up by up to eight per cent and the market will witness some five to seven per cent inflation in food stuffs and vegetables.
An increase in the price of diesel — the economy's main transportation fuel — will not only push up the cost of food items, including fruits and vegetables, and many other perishables that are moved largely by truck but also the operating cost of industries.
Minister for Commerce and Supplies Lekh Raj Bhatta, however, promised to bring special relief package to the poor. “The ministry is preparing working procedure to provide subsidy to the poor and students and it will come into effect within two months.
The price hike was a must since the NOC losses due to skyrocketing crude prices in the international market which have been hovering at around $100 to $111 a barrel, according to the ministry.
After the hike in petroleum products, the state oil monopoly will still suffer a total of Rs 860 million loss every month. The government has also planned to establish Price Stabilisation Fund to cushion the rise and fall of prices in the international market.