Amid growing public concern over rising fuel prices in Nepal, the Nepal Oil Corporation (NOC) has clarified that domestic petroleum prices are determined by international market rates—specifically the cost of refined fuels, not crude oil.
Nepal does not operate its own oil refinery, which means it relies entirely on importing processed petroleum products. As a result, the cost of petrol, diesel, and other fuels is inherently higher than crude oil prices. According to NOC spokesperson Manoj Thakur, comparisons between local fuel prices and global crude oil rates can be misleading; instead, they should be measured against international prices of refined fuels.
The NOC procures petroleum products from the Indian Oil Corporation (IOC), with prices automatically adjusted every 15 days based on IOC’s rates. Data from April 16, 2026, shows crude oil priced at 99.6 USD per barrel, while petrol reached 139.3 USD and diesel surged to 228.1 USD per barrel—highlighting a significant price gap.
Under typical conditions, petrol costs about 10 USD more than crude oil, and diesel about 20 USD more. However, recent geopolitical tensions in the Gulf region have dramatically widened this gap, pushing differences to 144 USD for petrol and 216 USD for diesel. This sharp increase has placed additional financial strain on countries like Nepal that depend on imported refined fuel.
Beyond international prices, several domestic factors also influence fuel costs, including customs duties, taxes, transportation, insurance, storage, and service charges. Reflecting these pressures, the NOC raised diesel and kerosene prices by Rs 30 per litre and aviation fuel by Rs 5 per litre on April 16.
Current fuel prices vary by region: diesel and petrol cost Rs 234.50 per litre in the first pricing cluster, Rs 236 in the second, and Rs 237 in the third. Despite these increases, the NOC reports a loss of Rs 99.96 per litre on diesel.
With global petroleum prices continuing to rise, the NOC projects a potential loss of Rs 5.75 billion over the next 15 days, signaling ongoing challenges for Nepal’s fuel economy.
