Mitigating Fuel Crisis

The disruptions of fuel supply via the Straits of Hormuz have caused a global energy crisis. Countries like Nepal, which rely solely on imported petroleum products, have faced an unprecedented shortage. The prices of petrol, diesel and aviation fuel have skyrocketed, with knock-on effects on every sector of the economy.  The Nepal government has taken a series of measures to mitigate the negative impacts on people's daily lives. A Cabinet meeting on Tuesday decided to reduce taxes - customs duty and infrastructure tax — on fuel by 50 per cent to ensure the smooth supply of PoL products. The government currently imposes Rs. 10 per litre infrastructure tax on petrol, with customs duty rates fixed at Rs. 25 per litre for petrol and Rs. 12 per litre for diesel and kerosene. Due to the price hike in the international markets, the NOC increased the fuel prices three times within a month. Petrol now costs Rs. 202 per litre and diesel Rs. 182 per litre. Their prices will go down only with stability in the energy markets. Although the tax waiver will not reduce the retail prices of PoL items, this will enable the Nepal Oil Corporation (NOC) to ease payment to the Indian Oil Corporation, Nepal’s sole supplier of PoL products. According to a new report of this daily, the country has incurred losses of nearly Rs. 11.72 billion in the past 15 days while purchasing the petroleum products from abroad. Now, the NOC’s financial loss will be reduced by Rs. 1.5 billion. 

To address the energy crisis, the government has urged people to reduce their fuel consumption. It has been estimated that the country currently consumes around 2,300–2,500 kilolitres of petrol and 4,800–5,000 kilolitres of diesel daily. It has also unveiled the policy of a two-day holiday – Saturday and Sunday – in a week for government offices and educational institutions, with office hours from 9 am to 5 pm. The authorities are also working on legal provisions to convert the petrol- and diesel-powered vehicles into electric ones.  It is mulling to implement the odd-even rule for vehicles. Similarly, the people have been urged to work from home to reduce fuel consumption. The work-from-home policy came into effect during the COVID-19 pandemic, when public mobility was strictly limited to contain the spread of the coronavirus. 

The government has also decided to scrap the fuel quota for high-level government officials, begin the new academic session at the end of April, and regulate the retail sale of fuel. It is prudent for people to switch to electric vehicles to save fuel and protect the environment. This energy emergency calls for public support of government measures. Everyone has a responsibility to support the government's efforts to overcome the current crisis. Meanwhile, the United States and Iran have reached a deal on a two-week ceasefire to de-escalate the conflict. Iran has also agreed to reopen the Strait of Hormuz for the passage of fuel-carrying ships. This has given a big respite to people all over the world. There is hope that the ceasefire will lead to lasting peace in West Asia and bring an end to the energy crisis.