Kathmandu, August 25:

Three men stood by their car as night fell. When a little white taxi approached, they peered into it and recognising the cabbie as a friend, hissed, “Need petrol? We know where you can get some.” The driver slowed down to say he would return for the few litres of black market petrol as that would save him queueing up an entire day.

How to get petrol is a burning topic in the country ever since sole supplier India refused to sell on credit a year ago to Nepal’s state-run fuel monopoly Nepal Oil Corporation (NOC) which owes India millions of dollars.

Ensuing shortage has led to rationing and kilometres long queues at petrol pumps. “I parked my truck in the line at 7 pm yesterday,” said food transporter Krishna Bahadur Shrestha, 40, who was number 56 in the queue for diesel. “They will only give me 10 or 15 litres. I can’t run my truck for even a full day on that,” he rued.

In recent months — despite hike in government-set prices in June — supply has shrunk even more as rising crude costs that India passes on to Nepal have further limited how much Nepal can buy in cash. But the government is subsidising pump prices for fear of widespread protests.

The policy has led NOC into a sink-hole of almost $230 million debt — and counting. In July, it was only able to import half of what it needed, which it sold at a loss of $11 million. Most

of that was diesel, which sells at a loss of 40 US cents a litre.

“Our purchasing price is higher than our selling price,” said Mukunda Prasad Dhungel, deputy director of NOC’s fuel supply and distribution department. “Price is fixed by the government. We can’t do much,” he said, adding the government should overhaul its fuel policy.

Maoist leader Prachanda, sworn in this month as the country’s new prime minister has promised to tackle food and fuel shortages gripping impoverished Nepal — but has not elaborated how.

Meanwhile, workers devote hours — even days — each week to tanking up. Drivers jostle to stay in line every time the queue edges forward, while enterprising snacks and water sellers gad up and down the queue to cater to captive customers.

People keep their ears pricked up to locate anyone who might be stockpiling fuel to sell on the black market. “A week ago, I waited six hours in the queue but when my turn came the pump ran out of petrol,” said taxi driver Bir Bahadur Lama. He eventually bought five litres from a bus driver who had picked up extra fuel on a trip south to the region bordering India.

“Life is getting miserable,” said Lama, who earns $103 a month but owes twice that in monthly payments on the new taxi he bought last year. Recently he had to borrow from friends and family to make the payments, racking up a hefty debt.

“I think I put my money in the wrong place,” said a morose Lama. “I spend more time queuing up at petrol pumps than waiting for customers.” Even those who don’t depend directly on fuel for livelihood are suffering.

Food prices have gone up by 20-30 per cent in recent months, according to the UN’s World Food Programme, because farmers have had to pay more to run tractors and transporters charge more to get food to markets.

“This subsidy system is destroying the country,” said Shiva Prasad Ghimire, president of Nepal’s Petroleum Dealers Association (NPDA), which wants the government to raise prices again. “All the money for development, roads and drinking water is going into covering NOC’s losses.”