No sooner had the holidays ended than the government increased the prices of all petroleum products by 17 to 100 percent. The people and businessmen had anticipated that prices would go up after the holidays, and had therefore started buying and stocking up. Dealers in petroleum products had started hoarding, and consumers had to stand in long lines to get their supplies, and now after the prices have been hiked, they have to shell out more money. It seems that the burden always falls on the ordinary people.
The Nepal Oil Corporation (NOC) increased the price of all petroleum products, stating that this was necessary as prices in the international market had increased substantially. The price of kerosene, an essential commodity for the poor people, has increased cent percent. Prices in the international markets are shooting through the roof, and this is going to adversely affect all the poor countries in the world. Last week, India increased the prices of petroleum products, and if Nepal had not followed suit, then most of the products from Nepal would have gone to India. Now the poor have no other option but to bear with the price rise.
The government has agreed to provide subsidised kerosene to the poor, but details have not been presented clearly. Questions such as the size of the family, how much is required for each family per month, and the case of single residents in the capital staying in rented accommodations etc, have so far not been answered. Black marketeers and hoarders will try and fudge answers to these questions, and this will lead to the abuse of the ration cards that the government plans to introduce soon. If the government does not do its homework properly, the only people who will profit from the rise will be black marketeers and hoarders.
Editorial in Kantipur, 15 October
It was wrong and unnecessary to hike the price of petroleum products all of a sudden. The rise in the price of petroleum products in the international market, the rise in prices of these products in India and the depreciation of the Nepali currency against the US dollar, are reasons given by the Nepal Oil Corporation for raising the price of petroleum products in the country. This is going to affect the development of the country. The rise in the price of fuel is going to affect the production and transportation of agricultural and industrial products. The ration card system is going to be introduced soon. Therefore the government should have thought of other ways of overcoming this problem instead of going in for a price hike.
Just before the hike, the NOC had repeatedly stated that prices would not rise, but all of a sudden it went on to announce the hike. This means that it was lying to the people, for which its reputation has taken a beating. People will not believe anything it says now.
There is unrest, and trouble is brewing in West Asia and Latin America, and these are the reasons for prices going up. Once peace returns, it is expected that the price of petroleum products will decrease and stabilise. The NOC should have studied the situation and explained it to the public. The lack of an explanation is going to lead people to not believe the reasons given by the NOC for raising prices.
The price of fuel in India has increased. One of the reasons given is that this has been done in order to stop smuggling of petroleum products from Nepal to India. This is a very stupid argument. To stop smuggling, the government should have taken strict measures, and not hold the nation hostage and increased prices. This is a wrong step. Yes, the Nepali rupee is depreciating against the dollar, but the hike in prices could have been carried out in a more systematic manner and slowly, instead of doing it in a haphazard and sudden manner. None of the reasons presented by the government in the present situation are justified or plausible. Raising prices right in the middle of the festive season is not correct. The main reasons for the rise in prices are inefficiency, leakage, and the mismanagement of the NOC. The NOC is inefficient and corrupt, and its management is weak.
The government, instead of raising prices drastically, should have studied other options and taken the people into confidence. The government should go for liberalisation in the sale and distribution of petroleum products, and should not be dependent on other nations. Conditions should be created to liberalise this sector, and to correct the ills of the NOC.
The decision to raise prices is not justified. The lies presented by the officials
of the NOC will not be forgiven, and it was a mistake to increase the price of petroleum products so drastically.