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An aviation fuel storage tank at the premises of Pokhara International Airport. Photo: RSS

Nepal Oil Corporation Limited (NOC) has reported mounting financial losses due to a sharp rise in international petroleum prices, while increasing aviation fuel rates.

Issuing a press statement on Tuesday, the corporation said global fuel prices have been rising continuously over the past month due to the ongoing conflict in the Middle East, preventing full adjustment of domestic prices under the automatic pricing system.

According to NOC, it incurred a loss of Rs 5 billion over a 15-day period from March 16 to 31.

Based on the latest purchase prices received from Indian Oil Corporation on March 31, the cost of petrol has increased by Rs 41.60 per litre, diesel by Rs 94.93 per litre, aviation fuel by Rs 123.8 per litre, and liquefied petroleum gas (LPG) by Rs 190.36 per cylinder.

Despite this, the corporation had adjusted retail prices only marginally on March 25, increasing petrol and diesel by Rs 15 per litre each. As a result, NOC said it is currently incurring losses of Rs 47.12 per litre on petrol, Rs 133.45 per litre on diesel, and Rs 416.37 per cylinder on LPG.

The corporation warned that if the current trend continues, biweekly losses could reach as high as Rs 13.21 billion.

Although fuel supplies from Indian Oil Corporation remain regular, NOC cautioned that delays in payments could disrupt supply management.

Amid the situation, the NOC board has decided to increase aviation fuel prices effective from 12:01 am on April 1. Domestic aviation fuel prices have been raised by Rs 124 per litre to Rs 251 per litre.

For international flights, aviation fuel prices for Kathmandu have been increased to USD 1,785 per kilolitre, while prices for Pokhara and Bhairahawa have been fixed at breakeven levels at USD 1,732 and USD 1,716 per kilo liters respectively.

However, the corporation has kept the retail prices of petrol, diesel/kerosene, and LPG unchanged until further notice, citing consumer interest and the use of its price stabilisation fund.

NOC has urged consumers to use petroleum products judiciously and called for cooperation from all stakeholders amid the challenging global market conditions.