Fuel frenzy

Nepal cannot bear the brunt of external shocks without a buffer of energy and food security.

The escalating conflict in West Asia and the subsequent disruption of the strategically vital Strait of Hormuz have triggered a severe economic tremor across the world, Nepal included. With petrol prices reaching a record Rs202 per litre in the Valley after the state-owned monopoly increased rates for the third time in less than a month, the structural fragility of a nation dependent on imported fossil fuels is undeniable. Approximately Rs300 billion in national capital is drained annually to pay for petroleum products. The current instability threatens the foundational economic pillars of agriculture, industry and services, placing nearly 25 percent of the Gross Domestic Product at immediate risk of sectoral disruption.