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Nepal’s state-owned fuel supplier has defended the recent rise in petroleum prices, citing soaring global oil costs and increased import rates from India as key factors behind the adjustment.

Chandika Bhatt, Executive Director of Nepal Oil Corporation (NOC), said the price hike was unavoidable due to a sharp increase in international crude oil prices and higher purchase rates from the Indian Oil Corporation, Nepal’s sole supplier. Despite tax concessions introduced by the government to ease the burden on consumers, Bhatt noted that the impact has been largely offset by continued volatility in the global market.

“Government subsidies have prevented prices from rising even further,” Bhatt said, adding that without such relief, fuel costs would be significantly higher than current levels. He explained that the corporation is currently selling fuel at a loss, with the cost price exceeding the retail price. NOC is also grappling with accumulated financial losses, making it necessary to maintain a balance between affordability and ensuring uninterrupted supply. Bhatt emphasised that Nepal follows an automatic pricing system, designed to adjust domestic fuel prices in line with international market trends—both upward and downward.

The corporation has also been working to reduce administrative costs and modernise operations, including digitising depot management and transportation systems to improve transparency and efficiency. While acknowledging that consumers are bearing part of the burden, Bhatt stressed that the corporation itself is also absorbing financial pressure.

Looking ahead, NOC plans to strengthen its price stabilisation fund and expand fuel storage capacity in an effort to cushion future market fluctuations.