The import of diesel and petrol in Nepal declined in the first half of the current fiscal year, driven by an ongoing economic slowdown and a growing shift toward electric vehicles (EVs).
According to records from the Department of Customs (DoC), diesel imports fell by 18.22 percent between mid-July 2023 and mid-January 2024 compared to the same period last fiscal year. In monetary terms, Nepal’s diesel import expenses dropped by Rs 12.12 billion in the first half of FY 2024/25.
During this period, the country imported diesel worth Rs 54.36 billion, down from Rs 66.49 billion in the previous year. The imported volume also saw a decline, dropping to 610,943 kiloliters from 618,356 kiloliters. As a result, customs revenue from petroleum imports fell from Rs 25.28 billion to Rs 24.26 billion.
Factors Behind the Decline
The slowdown in development projects and an increase in the adoption of EVs for public transport are among the key reasons for the decline in diesel imports.
Manoj Kumar Thakur, spokesperson for Nepal Oil Corporation (NOC), stated that reduced construction activities significantly impacted diesel consumption, as the fuel is primarily used in public transport and construction equipment. Government records indicate that the construction sector has been experiencing negative growth since the last two quarters of FY 2023/24, registering -0.3 percent growth in the first three months of the current fiscal year.
Additionally, low capital expenditure contributed to the reduced diesel imports. The government utilized only 16.16 percent of the Rs 352.35 billion allocated for capital projects during the review period.
Meanwhile, Nepal imported 5,480 electric four-wheelers worth Rs 13.19 billion in the past six months, up from 5,107 units worth Rs 12.73 billion in the same period last year.
Other Contributing Factors
Thakur also highlighted that the price difference between Nepal and India and the decline in power outages (load shedding) played a role in lowering diesel imports. Diesel prices are cheaper in India, prompting cargo trucks that previously refueled in Nepal to do so across the border instead.
Similarly, petrol imports also saw a 5.2 percent decline. Nepal imported petrol worth Rs 32.15 billion, down from Rs 33.92 billion in the corresponding period of the last fiscal year.
The declining trend in fossil fuel imports reflects both economic challenges and Nepal’s gradual transition toward cleaner energy alternatives.
