There are many places to start. The petrol and kerosene price hike was one opportunity to do things right, and we pretty much bungled it. The minister was right when he said he doesn't do populist stuff, it was not only not populist it was downright daft. Anyone who has seen the hundreds of Indians on bicycles along the Mahendra Highway at Kakarbhitta every morning filling up jerry cans of subsidised Nepali kerosene to sell in India knows what the real problem is. Some 1.6 million litres of kerosene goes into India every month from eastern Nepal alone because you can make a Rs 6 profit on each litre if you can take it across the border. The real problem here is the price gap in kerosene with India (which leads to smuggling) and the price gap within Nepal between kerosene and petrol/diesel (which leads to adulteration).

The Nepal Oil Corporation is bankrupt not so much because of subsidies as mis-management and corruption. It loses Rs 2.8 billion on kerosene subsidies, Rs 1.5 billion on diesel subsidies, but earns Rs 715 million from petrol sales every year. The fuel price hike will not make a dent on the NOC's finances. By just increasing petrol prices, we have not stopped kerosene smuggling, and made adulteration worse.

It's long overdue: end the NOC's corrupt monopoly on imported fuel and resume incentives for electrical transport.