NOC hikes diesel‚ kerosene prices

HIMALAYAN NEWS SERVICE

KATHMANDU: Nepal Oil Corporation (NOC) today hiked the price of diesel and kerosene for the fourth time since the beginning of 2012 by Rs 4 per litre to Rs 93 per litre in Kathmandu valley.

“With the increase, the monthly loss of the state oil monopoly will come down to Rs 131 million,” said NOC spokesperson Mukunda Prasad Dhungel. The corporation will make a profit of Rs 8.45 on a litre of kerosene but will still incur a loss of Rs 1.20 on a litre of diesel, he said.

However, with the price hike in diesel — widely used for transportation — transportation cost will go up, pushing the prices of essential commodities up, that will hit the common people hard.

“The repercussions of the fuel price hike will be harsh and wide since the trickle down effect of the hike in diesel price is felt in multiple sectors,” said senior economist Prof Dr Bishwambher Pyakuryal. “The general public, and industrial and transport sectors will face the problem together,” he said, adding that theoretically, the impact of the fuel price hike should not be seen immediately after the price hike decision.

“It is not fair to hike the price of food items and other commodities which are already in stock but due to lack of governance, the prices will start going up from tomorrow as traders will not follow the basic norms of the market economy taking advantage of the unregulated market,” he added.

Transporters will start hiking the price of transportation from tomorrow and the hike will have a cascading effect on food prices and other commodities related to everyday life, he said.

It is natural that the hike in the price of diesel and kerosene will add to the burden of household budgets already stretched by soaring prices of essential foodstuff, according to him.

The hike in the price of diesel will make cost of living dearer because fruits, foods and other perishables are moved largely by trucks and the transportation cost of these food items will go up.

Similarly, the cost of production of the industrial sector will also increase due to the price hike in diesel because it is largely used by industries due to the massive power outage, said Pyakuryal.

No one can oppose the decision of price adjustment of petroleum products, he said. “But the state should not adopt a strategy of status quo regarding the energy sector.”