Indian decision on fuel price may hit Nepal

Kathmandu, November 6:

Indian Prime Minister Manmohan Singh is scheduled to hold a meeting with the Indian Petroleum Minister tomorrow to discuss the crisis in the Indian market due to the rise in international oil prices.

Reports coming from India said India is mulling a marginal rise in petrol and diesel prices, cut excise duty on auto fuels and reduce customs duty on crude oil as options to tackle with the crisis.

Nepali officials are awaiting India’s desicion on oil prices as it could also affect the Nepali market. Bacchu Kafle, the deputy managing director of the Nepal Oil Corporation, said Nepal will be affected if India decides to keep the retail prices of petrol and diesel higher than in Nepal.

“Since we share an open border with India, if India keeps retail prices higher than in Nepal, there is a chance of Nepali petrol being smuggled into India.”

Kafle said the increase in prices in the Indian domestic market will not directly affect Nepal as the two countries trade in oil at international rates and the difference in retail prices arose because of different tax systems in the two countries.

Reports said India’s state-run fuel retailers — the Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum — have been losing Rs 240 crore a day on selling petrol, diesel, LPG and PDS kerosene after the government did not allow them to raise prices even when the global prices shot up.

Kafle said the Indian government was hesitating to make a decision on raising the prices due to nearing elections.