Petrol Price in Nepal Today

About Nepal Oil Corporation (NOC)

Nepal Oil Corporation (NOC) is the sole authorized importer and distributor of petroleum products in Nepal. Established in 1970, NOC operates as a government-owned entity under the Ministry of Industry, Commerce, and Supplies. All fuel prices in Nepal are set by NOC and are uniform across the country.

NOC imports petroleum products primarily from the Indian Oil Corporation (IOC) through a pipeline from Raxaul (India) to Amlekhgunj (Nepal) and via tanker trucks. The corporation operates storage depots in Amlekhgunj, Thankot, Pokhara, and other strategic locations.

How Fuel Prices Are Determined in Nepal

Fuel prices in Nepal are determined by several factors:

• Indian Oil Prices: Since Nepal imports most petroleum from India, the Indian market price forms the base cost.
• Exchange Rate: The NPR/INR exchange rate directly impacts the cost of importing fuel from India.
• Government Taxes: Excise duty, VAT, and other levies make up a significant portion of the retail fuel price in Nepal.
• Transportation Costs: The cost of transporting fuel from Indian refineries to Nepali depots and then to retail stations.
• NOC Margin: A margin for operational expenses and occasional cross-subsidization (e.g., diesel profits subsidize cooking gas losses).

NOC reviews and adjusts fuel prices periodically, typically every 15 days, based on changes in international oil prices and exchange rate fluctuations. Price revisions are published on NOC's official website.

How Fuel Pricing Works in Nepal

Nepal Oil Corporation (NOC) is the sole authority responsible for setting fuel prices across the country. As a government-owned monopoly, NOC imports petroleum products primarily from the Indian Oil Corporation (IOC) under a long-standing bilateral agreement. The pricing formula takes into account the base cost from IOC, transportation charges, customs duty, excise duty, VAT, and NOC's operational margin. The government occasionally provides subsidies on essential fuels like cooking gas (LP gas) and kerosene, while petrol and diesel prices are adjusted to cover costs and cross-subsidize other products.

NOC typically reviews fuel prices every 15 days based on changes in international oil markets and the INR/NPR exchange rate. However, price adjustments can be delayed due to political considerations, as fuel price hikes are often unpopular. The Amlekhgunj-Raxaul petroleum pipeline, which became operational in 2019, has reduced transportation costs and improved supply reliability compared to the previous tanker-based system.

Types of Fuel Available in Nepal

Nepal's fuel market includes several petroleum products, each serving different sectors of the economy. Petrol (gasoline) is primarily used for motorcycles, cars, and light vehicles, and is the most commonly purchased fuel at retail stations. Diesel powers heavy vehicles, buses, trucks, generators, and industrial machinery, making it critical for transportation and commerce. Kerosene is used in rural areas for cooking and lighting where LPG and electricity access is limited, though its usage has been declining with the expansion of the electricity grid.

LP Gas (liquefied petroleum gas) is the most common cooking fuel in urban Nepal, sold in 14.2 KG cylinders. The government often subsidizes LP gas prices to keep cooking fuel affordable for households. Aviation fuel (ATF) is used by domestic and international airlines operating in Nepal. Pricing differences between these fuels reflect their import costs, tax structures, and government subsidy policies – for example, diesel has historically been cheaper than petrol due to its essential role in public transportation and goods movement.

Frequently Asked Questions