Additional fee levied on petrol, diesel for road maintenance

Published On: May 30, 2019 11:12 AM NPT By: Republica | @RepublicaNepal

KATHMANDU, May 30: The government has decided to levy an additional Re 1 per liter fee on diesel and petrol for road maintenance.

Unveiling budget for Fiscal Year 2019/20 in Kathmandu on Wednesday, Minister of Finance Yuba Raj Khatiwada said that the government will collect an additional Re 1 per liter on petroleum and diesel to ensure that road maintenance work is not affected due to budget crunch.

The new tax is on top of Rs 5 per liter that the government is levying on diesel and petrol to raise funds for implementation of Budhigandaki Hydroelectric Project (1,200 MW).

Consumer rights activists have slammed the government for putting additional financial burden on consumers. “Nepal Oil Corporation (NOC) is making hefty profits. Instead of putting additional burden on consumers, profits mobilized by the NOC can be used for road maintenance and other works,” Baburam Humagain, general secretary of the Forum for Protection of Consumer Rights Nepal, told Republica.

The government has continued to impose additional taxes on petroleum products for development of petroleum infrastructures, pollution control, road maintenance and stabilizing prices, among others.

NOC, the state-owned petroleum monopolist, is levying 50 paisa per liter on petrol, diesel, and aviation turbine fuel (ATF) in the name of developing petroleum infrastructures.
Similarly, the government also collected Rs 4 per liter on petrol and Rs 2 per liter on diesel as road maintenance tax.

The government has collected Rs 2 billion in pollution tax and Rs 7.3 billion in road maintenance tax as of January. Similarly, another Rs 3.3 billion has been collected in Price Stabilization Fund.

Petrol is currently retailed at Rs 109.5 per liter, while selling price of diesel Rs 97 per liter. The decision means price of petrol and diesel will increase to Rs 110.5 and Rs 98 per liter, respectively.