Following much hue and cry over the rising cost of living, the government has slashed fuel prices from Sunday in a bid to provide some respite to the people, hoping to see a corresponding lowering of commodity prices. Following a meeting of the five-party ruling coalition on Saturday, the cabinet had sat to take a decision to reduce certain taxes levied on petroleum products. Consequently, the price of petrol has come down by Rs 20 a litre to Rs 179, and by Rs 29 a litre in the case of diesel and kerosene to Rs 163. Only a week ago, on June 19, state-owned Nepal Oil Corporation (NOC) had jacked up the price of petrol by Rs 21 a litre to Rs 199 and diesel by Rs 27 a litre to Rs 192. Fuel prices have been increasing at an alarming rate since the invasion of Ukraine by Russia on February 24 this year. At the start of the Ukraine war, petrol was selling at Rs 145 a litre and diesel at Rs 128. But with the price of crude oil doubling in the international market by early March, and increasing ever since, it has thrown people's life out of gear not only in Nepal but also in Europe, Americas, Africa and Asia.

But the question is, will the lowering of fuel prices provide the expected relief to the people? The past few months have seen food prices go through the roof, making everything from flour, cooking oil to sugar very dear for the common people. According to Nepal Retailers Association, the price of LPG gas has gone up by Rs 325 a cylinder in the last two years, cooking oil by Rs 185-200 a litre, dal by Rs 35-80 a kilo, ghee by Rs 400 a litre and sugar by Rs 25 a kilo, with much of the price hike having taken place in the last few months.

With the increase in fuel prices, the cost of transporting goods naturally goes up, with fuel deciding up to 35 per cent of the transportation fare. Another factor abetting inflation in Nepal is the sharp depreciation of the Nepali rupee against the U.S. dollar.

From around Rs 119.34 to a dollar at the start of the Ukraine war, it was Rs 125 on Sunday. For an economy that has no manufacturing base and relies on imports for almost everything, any fluctuation in commodity and fuel prices in the international market has a direct impact on the cost of living here in Nepal.

While we can blame a variety of factors for the rising cost of food in the market, it wouldn't have been so high if there had been effective monitoring by the government. Without a strong presence of the government to implement the laws, the traders have been taking undue advantage, hiking prices of food and goods at will. While the price hike of basic foodstuffs affects everyone, it particularly devastates the poor and those with limited income, who already must spend the bulk of their earnings on food. In Nepal, 18.7 per cent of its population is said to be living below the poverty line, and high inflation is likely to push more people into poverty. Thus, the government cannot just pay lip service to market monitoring, it has to be effective. Since there are external factors pushing up inflation here, it is necessary to reduce the consumption pattern in the country through the government's monetary policy so as to save on the scarce foreign exchange reserve.

Stay on high alert

The rising number of coronavirus infections in many cities in India in recent times should be a wake-up call for Nepal because of the open border between the two countries. Although no death from the COVID-19 infection has been reported since the past couple of months in Nepal, security personnel manned at various customs points and bordering towns with the Indian states of Bihar and Uttar Pradesh must be kept on high alert to prevent infected persons from entering Nepal through the porous border. Nepal's security personnel could ask Indian nationals to produce valid booster dose papers before they are allowed to enter Nepal by road.

Arrival of Indian tourists has increased recently in Kathmandu and Pokhara to avoid the scorching heat in India. But only non-infected tourists should be allowed to visit the country.

People in Nepal have also stopped using face masks and also avoided social distancing following the mass immunisation. Life has returned to normalcy with business activities resuming as usual. However, we should not take COVID-19 lightly as it might resurface if we do not follow the health protocols, such as maintaining physical distancing and wearing a face mask whenever we venture out of our homes.

A version of this article appears in the print on June 27, 2022, of The Himalayan Times.