Nepal Oil Corporation Holds Fuel Prices Steady for Festivals Despite Rs 3.45 Billion Loss

Nepal Oil Corporation (NOC) has decided to keep retail prices of petroleum products unchanged across Nepal ahead of the upcoming festivals, despite receiving a new purchase price from Indian Oil Corporation (IOC). The corporation’s board of directors approved the decision, citing festival-season considerations and consumer interests, while NOC said sharp international crude oil price fluctuations linked to the ongoing war in the Middle East had prevented an adjustment under its automatic pricing system. The decision has left the corporation facing a loss of about Rs 3.45 billion over 15 days.

Prices held steady despite new purchase rates

The board’s decision means consumers will continue to pay the existing retail prices for petroleum products, rather than see them adjusted in response to the latest purchase prices received from IOC. NOC said the decision was made with the upcoming festivals and the interests of consumers in mind. The corporation did not change retail prices even though it had received updated purchase-price information from its Indian supplier.

NOC’s account points to a difficult balance between the purchase costs it faces and the prices charged to consumers. Keeping retail prices unchanged avoids an immediate price adjustment for customers, but the corporation says the choice has come with a substantial financial cost. Its reported loss of about Rs 3.45 billion in 15 days shows the scale of the pressure associated with maintaining current prices during this period.

The corporation’s board of directors made the decision, rather than applying a price change through the usual automatic mechanism. The announcement therefore reflects a board-level choice to hold prices steady as festivals approach, despite the new purchase rates. NOC cited consumer interests as a factor in that decision, but its reported loss underscores the consequences for the corporation of not adjusting retail prices during the same period.

International volatility complicates automatic pricing

NOC said it could not adjust prices under the automatic pricing system because international crude oil prices have been fluctuating sharply. The corporation linked that volatility to the ongoing war in the Middle East. The changing international market conditions, together with the new purchase price received from IOC, formed the backdrop to the board’s decision to leave retail rates unchanged.

The automatic pricing system was therefore not used to make a retail price adjustment at this time. NOC’s explanation connects the decision to the difficulty of responding to volatile crude prices while also weighing consumer interests during the festival period. The corporation has not announced a change in retail prices as part of this decision, and its stated financial loss indicates that the unchanged rates have not removed the pressure created by the current pricing conditions.

Festival-season decision carries a financial cost

For consumers, the immediate outcome is continuity: retail petroleum prices remain unchanged as the festivals approach. For NOC, the decision has meant absorbing a reported loss of about Rs 3.45 billion over 15 days. The contrast between stable prices for consumers and the loss reported by the corporation is central to the announcement.

NOC’s decision was made despite receiving revised purchase-price information from IOC, and the corporation has pointed to international crude price fluctuations as a reason it could not adjust prices through the automatic system. Its board chose to keep prices unchanged, taking the festival period and consumer interests into account. The corporation’s reported loss makes clear that holding retail rates steady has had a significant financial consequence, even as consumers are spared an immediate price change.