The adoption of automatic fuel pricing mechanism in the latter months of 2014 worked wonders for consumers as price of petrol, diesel, kerosene and LP gas started falling in line with the international price movement. Price of crude oil fell to 11-year low of $37 per barrel in December.
Another major development is the signing of Memorandum of Understanding (MoU) for implementation of the highly anticipated 41-kilometer Raxaul-Amlekhgunj Petroleum Pipeline Project on August 24. The agreement was aimed at smoothening supply of petroleum products to Nepal. The project was expected to be completed within 30 months. However, the project has failed to take off.
Supply of petroleum products, however, has been affected since September after India stopped supplies citing security reasons due to Tarai unrest. Domestic market immediately witnessed shortage of essentials commodities like fossil fuel, medicine and other food products. Shortage led to black market of essential commodities. Despite the shortage, petrol, diesel and LP gas are available at black market at a much higher price. Because of LP gas shortage, urban households have to resort to firewood to prepare their meal.
Consumer right activists like Madhav Timalsina of Consumer Rights' Investigation Forum terms 2015 as a black year for consumers. “Earthquake and blockade resulted to shortage of fuel and other essential commodities. Black marketers left no stone unturned to exploit the situation. This hit consumers hard,” said Timalsina.
The framework agreement with China for petroleum trade, however, has raised some hopes. Similarly, the news of opening new trade routes with China and diversifying trade with the northern neighbor have created optimism among people that quake and blockade-hit market economy will revive soon.
However, there has been no visible change so far. Falling petroleum process is not benefiting Nepali consumers. The pipeline project has yet to come into implementation. Black market of petroleum products and other essential goods is getting big. Commercial agreement with China for petroleum trade has not been signed. And there is no end in sight to scarcity of fossil fuel.
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