KATHMANDU (AFP) — Thousands of cars and motorbikes formed long queues at petrol pumps in Nepal's capital on Thursday after officials warned of a looming fuel shortage because of a failure to pay their oil and gas bills.
Landlocked Nepal has no oil reserves and relies on giant southern neighbour India to truck in petrol, gas and other fuel. But supplies have been tightened after the impoverished Himalayan country failed to pay its bills.
"Over the past few weeks, the Indian Oil Corporation has cut the supplies by 40 to 60 percent to us as we have not been able to pay overdue bills," said Iccha Bikram Shah, a spokesman at the state-run Nepal Oil Corporation.
"The stock we have now would last for just two to three days more," he told AFP.
The Nepal Oil Corporation, a monopoly, sells fuel products at a loss, and as a result has monthly loss of 3.84 million dollars. It currently owes the Indian Oil Corporation (IOC) 45.7 million dollars.
Shah said Nepal's government "needs to provide funds to us to pay to the IOC, or they should increase the price of petroleum products," Shah said.
Last August the government tried to increase the price of petroleum products by up to 25 percent, but backed down from the move after two days of protests at the price hike.
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