Nepal fuel crisis bites as supplies dwindle| MENAFN.COM

Wednesday, 29 June 2022 10:22 GMT

Nepal fuel crisis bites as supplies dwindle

(MENAFN- Gulf Times) For Baburaja Maharjan, 2015 has been a long haul full of hardship, even before the harsh Nepalese winter arrives.
His house on the outskirts of Kathmandu collapsed during the April 25 earthquake, forcing him to move first to a tent for a few months, and then to rented accommodation because he did not have enough money to
rebuild his home.
For the past few months, however, his main focus has been keeping his family going during a fuel crisis that has crippled the country.
"There are problems everywhere I look," Maharjan, 39, says in frustration. "I don't know how to get my father to hospital for his treatment or to buy the next dose of medicines. I don't know how to get to work, and I don't know how much longer before the cooking gas runs out and I can't cook anymore to feed my family."
About three months ago, protests over Nepal's new constitution led to violent protests and strikes, and eventually a complete halt to fuel trucks coming from across the border in India.
India denies it has imposed a blockade, but for the past two months Delhi has refused to allow vehicles to pass through, citing security concerns due to the protests, which have killed nearly 50 people.
Aside from provoking anti-India sentiment among Nepalese, the border closure has hit locals hard.
Maharjan says he bought some fuel for 500 rupees ($5) per litre on the rejuvenated black market, but it was adulterated and ruined his motorbike's engine.
Snaking lines of cars lead to and from the petrol station in the capital, where people hope to get their government ration of fuel.
Buying food has become a competition between desperate residents.
"We were literally fighting over a box of cooking oil. By the time I turned around to get more stuff off the shelf, the things I had set aside to buy had been taken by other customers," Maharjan said.
Those who can afford it are stockpiling food, leading shopkeepers to hike prices further.
Others with less money, like Kathmandu resident Debaki Kharel, are reliant on Nepal's already overstretched electricity grid.
"We have run out of cooking gas, so we cook a mixed meal of daal (lentils), bhaat (rice) and tarkari (vegetables) when we can get the electricity and store it in insulated containers so we have two meals a day," said Kharel, who has been living in a rented place on the outskirts of the
During winter, the power blown-outs last up to 12 hours per day.
China donated 1mn litres of fuel to Nepal last week and the two countries agreed on Thursday to improve their treacherous land routes and to open seven border points.
"The difficult geographical terrain between Nepal and China makes trade between the two countries very challenging," says Himal Neupane, an economic analyst who works with Kantipur Television.
"India has an upper hand in terms of trade because we share the plains route with them, and bringing goods in from India has always been easier logistically."
China and Nepal also signed a deal on future fuel purchases, breaking the Indian monopoly on fuel imports that is the major factor in the current crisis.
The finance ministry estimates that Nepal's industrial sector has incurred losses of about 4bn rupees ($37mn) during the last two months of the fuel pinch.
This pales in comparison to the cost of recovery from the April quake - put at $7.1bn by the Asian Development Bank - but it is another serious blow to a fragile country going through
political change.
"Most of our industries have closed because we don't have the raw materials required to run them, as our industrial raw material also has to come via India," says Neupane.
Ninety per cent of factories have shut due to the oil crunch, according to the Federation of Nepalese Chamber of Commerce and Industries.
Neupane predicts GDP growth may fall below 3% as a result of the shutdown, after spending most of the last decade well above that level.
Nepal's main revenue earner - tourism - has also been badly affected by a string of fatal accidents on the country's
famous mountain ranges.
"Most of our groups are cancelling trips because there's so much bad news from Nepal," said Nima Sherpa, of Sherpa Khangri Outdoor Trekking. "We haven't had any business since the avalanche caused by the April 25 earthquake killed people on Everest Base Camp. Business is at a standstill for most of us in this industry right now."
Talks between Nepalese and Indian officials have failed to find a solution to the crisis, although Kathmandu is expected to hold further negotiations with Delhi and with the southern protesters.
Neupane sums up Nepal's predicament: "We don't have an industrial base due to lack of raw material. If we had processing capacity of our own, it would have been possible to keep industry running. Another major industry - tourism - was already reeling under the impact of disasters, and the fuel crisis has added to it."

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