The country's total export receipt is less than its import bill for petroleum products.
The country witnessed merchandise exports worth Rs 42.59 billion in the first seven months of the current fiscal year, whereas it imported Rs 48.87 billion worth petroleum products, according to the central bank.
The import has also increased to more than double in the last two years.
The country imported Rs 48.87 billion worth petroleum products till mid-February of the current fiscal year 2011-12 compared to the same period in 2009-10, the central bank data revealed. "In the seven months of 2009-10, the country had imported Rs 23.84 billion worth petroleum products."
Similarly, the state oil monopoly has imported record high 116,000 standard units (kiloliter and metric tonne) petroleum products including cooking gas in March.
"It is the highest import in a month in the last 42-year long history of the Nepal Oil Corporation," acting managing director at the corporation Suresh Kumar Agrawal said. "In February, it has imported 109,000 standard units of petroleum products."
The corporation has projected that domestic market consumes 17,000 kilo liter (kl) petrol, 65,000 kl diesel, 6,000 kl kerosene, 10,000 kl Aviation Turbine Fuel (ATF) in a normal situation. Similarly, it has projected consumption of a total of 17,000 metric tonne cooking gas every month.
The consumption of fuel is surging in the domestic market due to increasing number of vehicle and load-shedding hours, Agrawal said, adding that it is high time to seek option since the country does not have any refineries and resources to produce fossile fuel.
Similarly, the economists also take skyrocketing imports of petroleum products as not a good sign for economy. “The surging import figure of petroleum products is not a good sign for the economy," said economist Dr Chiranjivi Nepal.
Had the productive sector increased, the increase of petroleum products import could have been justified, he said, adding that the country has witnessed a steep increment in the consumption of petroleum product at a time, when the productive sector is not performing well and even most of the industries have closed.
"The surge in import of petroleum products will have all-side impact," Nepal said. "It will not only increase trade imbalance but also the overall economy."
"Some 20 per cent of the populations consume imported petroleum products,” he said, adding that the remaining 80 per cent do not use petroleum products but they will also suffer due to economic downturn as the whole economy will collapse once the inflow of remittance decreases.
The government must check imbalance of productive sector's growth and fuel import, he suggested. "The current growth of fuel consumption shows that the country’s dependency on fuel is going to increase in the coming years too."
The import of petroleum products' rise also revealed that people have no confidence on the government that it can ensure smooth supply, he said, adding that there is a massive hoarding of petroleum products by dealers and the general consumers both. "Hydropower development is the only option to save the economy."
Loss in cooking gas up
KATHMANDU: The loss of Nepal Oil Corporation has increased to Rs 1.52 billion from 1.2 billion, according to March 1 price list sent by Indian Oil Corporation. The loss went up due to volatile price of Liquified Petroleum Gas (LPG) popularly known as cooking gas, the corporation said. “The corporation will have to bear a loss of Rs 802 in a cylinder of cooking gas according to revised price list of Indian Oil Corporation (IOC).