December 26: Import and consumption of aviation fuel have decreased in the last five months of the current fiscal year in Nepal.

According to the data at the Department of the Customs, Nepal has imported 74, 221 kilolitres of aviation fuel worth Rs 9.20 billion in the five months of the current fiscal year.  In the same period last year, Nepal imported 80,744 kilolitres of jet fuel worth Rs 4.18 billion.

Experts in the aviation industry say that since international airlines do not refuel in Nepal, consumption of the aviation fuel has decreased along with its import. However, spokesperson Binitmani Upadhayya at the Nepal Oil Corporation claimed that sales of aviation fuel had dropped due to the fall in international flights post-COVID situation. 

“Sales of aviation fuel stood at 607 kilolitres a day before 2076 BS. Fuel consumption is around 500 kilolitres at the moment”, Upadhaya said adding “Aviation fuel sale will get back to the pre-COVID level slowly”. 
 

Despite the fall in the consumption of aviation fuel, international flights to and from Nepal have, however, increased compared to the last year. Likewise, the number of domestic flights has not gone down as well.  

Tribhuvan International Airport’s spokesperson Teknath Sitaula said number of flights had remained unchanged in the last five months. Nepali airports conduct 35 international flights daily on average these days.

Normally, international airlines refuel in Nepal when the price is equal to the international market. Even though the price of fuels, including aviation fuel, has declined in the international market, Nepal Oil Corporation (NOC) has not adjusted the price of aviation fuel to cover the losses. Aviation experts say that international airlines refuel at transit not in Nepal owing to high prices. 

Board of Directors of the Nepal Oil Corporation fixes the prices of aviation fuel and LP gas. However, price of aviation fuel has not been adjusted because the NOC Board of Directors has not held the meeting for a long time, according to Upadhyay.

According to NOC, the current price of aviation fuel in Nepal is USD 1.645 per litre.  Nepal Rastra Bank has set the selling rate of USD 1 to NRP 132.88. 

Failure to adjust the price of international aviation fuel has  reduced consumption, decreasing the profit of the NOC. The more aviation fuel NOC sells, the more profit it makes. 

Since NOC makes income in the US Dollar from the sale of aviation fuel to international airlines, it will not reduce the country’s foreign currency reserve, say knowledgeable people.