Er.energyNP@Gmail.com

Nepal Oil Corporation (NOC) has adopted a wait-and-watch approach as it faces mounting pressure to revise fuel prices following a sharp increase in global oil prices, driven by the ongoing crisis in the Middle East.

Tensions have escalated in key oil-supplying nations including Qatar, Saudi Arabia, Iraq, and Kuwait amid heightened US-Iran conflict, pushing international petroleum prices upward. Brent crude, the global benchmark, surged more than 20 percent on Sunday, briefly topping $114 per barrel - the highest level since July 2022.

According to Indian media reports, producers such as Kuwait and the United Arab Emirates have begun reducing output as storage facilities near capacity with the Strait of Hormuz still blocked. Iraq also started curbing production last week under similar constraints. Over the past month, oil prices have risen by more than $40 per barrel, climbing from $70 per barrel at the end of January.

Chandika Prasad Bhatta, managing director of NOC, told Republica that the corporation has not received any concerning notices from Indian Oil Corporation (IOC) despite the ongoing instability. “We currently have diesel and petrol stocks sufficient for 13 days, and air turbine fuel for more than 15 days. Additionally, we are receiving uninterrupted fuel supplies through cross-border pipelines,” Bhatta said.

While NOC has ruled out the possibility of a shortage of petroleum products - including cooking gas - across the country, price stability remains uncertain. The corporation revises its fuel prices on a fortnightly basis based on rates set by IOC, in line with the automatic pricing mechanism adopted in September 2014.

Bhatta noted that any revision in fuel prices will depend on the new rates expected from IOC in the coming days. “We will explore financial adjustments as much as possible to minimize the impact on the domestic market if needed,” he added.

Global oil prices have seen significant volatility over the past two decades. In July 2008, they reached an all-time high of $147.50 per barrel. During the COVID-19 pandemic, prices fell sharply to $23.57 per barrel in June 2020, only to surge again to $140 per barrel in March 2022.