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The price of aviation fuel has nearly doubled. The Nepal Oil Corporation (NOC) has increased the prices of aviation fuel for both domestic and international flights to almost double the previous rates.

A meeting of the NOC Board of Directors held on Tuesday evening decided to raise the price of aviation fuel for domestic flights by Rs. 124 per litre and for international flights in Kathmandu to USD 819 per kilolitre. The new rates came into effect from Wednesday morning.

With the revision, the price of aviation fuel for domestic flights has increased from Rs. 127 per litre to Rs. 251 per litre.

For international aviation fuel, the price in Kathmandu has been set at USD 819 per kilolitre, while rates in Pokhara and Bhairahawa have been adjusted to break-even levels.

In Pokhara, the price has risen from USD 801 per kilolitre to USD 1,732 per kilolitre, while in Bhairahawa it has increased from USD 789 to USD 1,716 per kilolitre.

However, to protect consumers, the corporation has decided to keep the retail prices of petrol, diesel/kerosene, and LPG unchanged for now, using the price stabilisation fund to cushion some of the losses.

The price of petrol stands at Rs. 187 per litre, while diesel and kerosene each stand at Rs. 167 per litre. The price of a half-filled cooking gas cylinder is Rs. 955.

The ongoing conflict in the Middle East has triggered a sharp rise in international petroleum prices, placing significant financial strain on Nepal’s fuel supply system, said NOC.

According to NOC, the continued increase in global fuel prices has prevented timely adjustments under the automatic pricing mechanism. Over a 15-day period from March 16 to March 31, NOC reported losses of approximately Rs. 5 billion.

The situation has worsened following the latest purchase rates received on March 31 from the Indian Oil Corporation (IOC).

The new rates show steep increases: petrol by Rs. 41.60 per litre, diesel by Rs. 94.93 per litre, aviation fuel by Rs. 123.08 per litre, and LPG by Rs. 190.36 per cylinder.

Despite a recent adjustment on March 25, when retail prices of petrol and diesel were increased by Rs. 15 per litre each, the corporation has been unable to fully reflect earlier price hikes.

As a result, NOC is currently incurring losses of Rs. 47.12 per litre in petrol, Rs. 133.45 per litre in diesel, and Rs. 416.37 per LPG cylinder.

If the trend continues, projected fortnightly losses could reach Rs. 13.21 billion, it said.

Although IOC continues to supply petroleum products as requested, NOC has warned that delays in payments could disrupt future supply management.