Nepal's Petroleum Import Bill Declines by NPR 11.07 Billion Despite Increased Import Volume

Nepal’s import bill for petroleum products declined by NPR 11.07 billion in the last fiscal year, despite an increase in the volume of fossil fuels imported. According to records from the Department of Customs (DoC), petroleum products worth NPR 267.68 billion were imported in FY 2023/24, down from NPR 278.75 billion in FY 2022/23. This represents a 4% reduction in the country’s expenditure on importing petroleum products.

A significant portion of the savings came from a reduction in the import bill for diesel, which fell by around NPR 10 billion. In the previous fiscal year, Nepal imported diesel worth NPR 153.76 billion, while in the last fiscal year, this amount decreased to NPR 143.97 billion.

Similarly, the import bill for cooking gas dropped from NPR 58.15 billion to NPR 55.61 billion. However, the import bill for petrol increased from NPR 66.84 billion to NPR 68.10 billion.

Manoj Thakur, spokesperson for the Nepal Oil Corporation (NOC), attributed the decline in import expenses to lower fuel prices in the international market during the review period. “On the contrary, the import volume has increased,” said Thakur.

Despite the reduction in monetary value, the volume of imported fossil fuels surged in the last fiscal year. According to the DoC, petrol imports increased from 1,408,494 kiloliters to 1,411,440 kiloliters.

The increased volume of diesel imports has been attributed to the poor electricity supply to the manufacturing sector. Entrepreneurs have criticized the Nepal Electricity Authority for unannounced load shedding in production businesses.

Additionally, the import of petrol rose from 680,000 kiloliters to 687,931 kiloliters, and the import of cooking gas jumped from 514.3 million kilograms to 524.2 million kilograms.

Analysts suggest that the increased purchase of four-wheelers, driven by changes in lifestyle, has contributed to higher petrol import expenses. This trend also indicates that the increase in electric vehicle imports has not significantly replaced the use of petrol-based cars. The DoC statistics reveal that Nepal imported 11,701 electric vehicles in FY 2023/24, nearly three times the number imported in the previous fiscal year.