According to the minister, Nepal will soon eliminate the infrastructure fee for petroleum products.


Nepal is striving to abolish the infrastructure tax on petroleum products as soon as possible in order to reduce the country’s record-high petrol prices. In his presentation to the lower house on Friday, Dilendra Prasad Badu, Minister for Industry, Commerce, and Supplies, informed the parliament that a meeting of the council of ministers had already made the decision. “Due to the increase in the price of petroleum goods, and in consideration of the discomfort experienced by the general population, the government’s taxation on petroleum products will be adjusted,” he stated.


“A proposal has already been endorsed by a cabinet meeting held on Tuesday (May 24). Regarding the adjustments to be made on the levied taxes, the Ministry of Finance is working into it,” Minister Badu said further. At present, an infrastructure tax of Nepali rupees 10 is being levied on petrol. As per the sources, the Ministry is working on the removal of the tax levied on it and submit the report by next week. With the recommendation to be placed into action, the price of petroleum is expected to reduce by Nepali rupees 10 per liter.

Petroleum products are subject to customs and declaration fees, road maintenance charges, pollution charges, infrastructure taxes, and money going to the price stabilization fund. Adding all these taxes and fees, Nepali rupees 63.34 per liter of petrol (Nepali rupees 180) goes to the government account. The state-owned monopolist- Nepal Oil Corporation earlier on Sunday (May 22) hiked the prices of petrol, diesel, kerosene, aviation fuel, and cooking gas. The NOC increased the prices of petrol, diesel kerosene, and aviation fuel (domestic) by Nepali rupees 10 per liter.

Likewise, the price of cooking gas was increased by Nepali rupees 200 per cylinder. With the new price list, petrol costs Nepali rupees 180 per liter and Nepali rupees 163 per litre for diesel and kerosene while Nepali rupees 166 per liter for domestic aviation fuel. Earlier on May 14, the state monopoly had increased the prices of petrol, diesel, and kerosene by Nepali rupees 10 per liter. Following the revision, petrol will now cost Nepali rupees 180 per litre, while diesel and kerosene will cost Nepali rupees 163 a litre each. LPG will cost Nepali rupees 1,800 per cylinder.

NOC further has stated that its fortnightly losses, after the price revision, would be Nepali rupees 3.35 billion, indicating another hike soon. In addition, Nepali rupees 43 billion amount that it needs to pay its supplier Indian Oil Corporation, by May, only Nepali rupees 20.60 billion has been cleared so far due to cash shortage, the state owned supplier stated. It owes Nepali rupees 22.40 billion in dues to the Indian Oil Corporation.


According to NOC, it is purchasing petrol at Nepali rupees 194.64 per litre, diesel at Nepali rupees 189.82 a litre, kerosene at Nepali rupees 140 per litre, domestic aviation fuel at Nepali rupees 152.02 a litre, international aviation fuel at Nepali rupees 131.19 per litre, and LPG at Nepali rupees 2,679.75 a cylinder from the Indian Oil Corporation. Despite the increase in fuel prices in the domestic market, the NOC has clarified that it would still face losses of Nepali rupees 14.64 per litre on petrol and Nepali rupees 23.82 a litre on diesel. It will incur a loss of Nepali rupees 869.75 per cylinder of cooking gas.

The state monopoly earlier in January had declared itself bankrupt despite hiking fuel prices to near-record levels. The high cost of fuel is digging deeper into consumers’ pockets, and the monthly consumer price inflation climbed to its highest level of 7.28 per cent in the first nine months of the current fiscal year that ended in mid-April. The transport and airline industry may increase the ticket rates as per the auto pricing mechanism. Since this month, the government has allowed transport operators to revise fares if the fuel price fluctuates by Nepali rupees 5 per litre.