International Desk :
One month after Russia’s invasion of Ukraine, the fallout of the war on global fuel prices threatens to derail Nepal’s aviation and tourism sector which was finally reviving after two years of the Covid pandemic.
Nepal Oil Corporation (NOC) has raised prices for petrol and diesel at filling stations several times, but it is aviation turbine fuel (ATF) that has seen the steepest hike.
International airlines serving Kathmandu which had already seen some booking cancellations due to the Ukraine war are now paying double the rate for refuelling their planes at Kathmandu airport, reports Nepali Times
ATF cost in Kathmandu has risen steeply from $715 per kilolitre in June last year to nearly $1,500 after the latest NOC price hike on 17 March.
But the NOC appears to be passing on the rising import bill for petroleum products to its customers, while keeping its profit margins intact. The state-owned monopoly’s own website shows that the profit it makes from ATF sold to airlines has risen from Rs23.92 per litreinJanuary to Rs67.93 this week.
The NOC’s overall fortnightly losses have also soared from Rs1.83 billion to Rs4.66 in that same period. It is clear that NOC is compensating for its losses from petrol, diesel and LPG sales at fuel stations by doubling the price it charges airlines in order to subsidise Nepali customers.
NOC officials have justified the price hike saying that the fuel needs to be transported in tankers from the Indian border, and the hike in diesel prices has added to the cost of ATF in the international market.
However, the price of aviation fuel at Indian airports was only $900 per kilolitre – which is $600 less than in Kathmandu.
Nepal’s domestic airlines, which were seeing a boom since the Omicron wave started to subside earlier this year, have passed on the added cost to passengers with a hefty fuel surcharge.
However, it is medium and long haul operators to Kathmandu like Singapore Airlines, Korean Air, Turkish Airlines, Qatar Airways, Himalaya Airlines and Nepal Airlines which have been hit hardest. Airlines have started flying in on full tanks only topping up in Kathmandu to save on fuel costs.
