South Asian Business news and information

Nepal is not a rich country and it does not have any oil reserve. So, you can easily understand that fuel is a big problem for the economy of the country. The price of oil has showed no sign of decreasing in the last few months in the international market. So, Nepal Oil Corporation has to buy oil from India in higher price and sell in the country in lower price.

Nepal Oil Corporation is now suffering cash shortage as it is just incurring loss. I am surprised that Nepalese government is asking Nepal Oil Corporation to continue subsidy in oil price but is not helping it with money. So, Nepal Oil Corporation is finding it difficult to get oil from India as it owes Indian Oil Corporation a huge amount of money already.

AFP reported:

Landlocked Nepal has no oil reserves and relies on giant southern neighbour India to truck in petrol, gas and other fuel. But supplies have been tightened after the impoverished Himalayan country failed to pay its bills.

"Over the past few weeks, the Indian Oil Corporation has cut the supplies by 40 to 60 percent to us as we have not been able to pay overdue bills," said Iccha Bikram Shah, a spokesman at the state-run Nepal Oil Corporation.

"The stock we have now would last for just two to three days more," he told AFP.

It seems that the only thing that Nepalese government can do is to increase the price of oil in the domestic oil. Well, that won’t be popular at all. So, Nepalese government has to find a middle ground to solve this problem.