By Ajay Chhetri, Kathmandu, August 24: Nepal Oil Corporation NOC) has increased the price of petroleum effective from 24 August. This could give rise to the inflation in future.

The price hike could be owing to the rising crude price in the international market. Petroleum price went higher as Brent crude futures gained 0.9 per cent to $ 69.41 a barrel while U.S. West Texas Intermediate (WTI) crude futures increased by 0.9 per cent to $ 66.24 a barrel on August 17. Following the U.S drug regulator's full approval to the Pfizer Inc/BioNTech SE COVID-19 vaccine, the hope of investors stoked up of higher fuel demand, which resulted in the increase of fuel price in the futures market.

Its impact has been directly rippled in petroleum prices in Nepal as well. With the announcement of a new price of petroleum on 23 August, petrol was priced Rs. 130 per liter up from Rs 128 a day ago in addition to the diesel and kerosene Rs. 113 up from Rs. 111 per liter. The NOC has added up Rs. 25 in LP gas. The consumer price of gas has become Rs. 1450 while it was Rs. 1425 per cylinder previously.

Meanwhile, NOC spokesperson Binit Mani Upaddhya said that NOC has increased the price of petroleum in compulsion. He said that NOC is bearing loss for a long period of time. He said that NOC is forced to raise the price of fuel to recuperate from the accumulating loss.

Executive director of Nepal Rastra Bank Prakash Kumar Shrestha said that the rise in the fuel price will hurt the consumer in the coming days. He, however, said that it would be a bit early to predict the degree of rate change in the consumer price index (CPI) as the price of some of commodities may fall over a period of time.