Kathmandu, January 4

With an aim to increase the consumption of electricity in the domestic market, the government is preparing to remove the subsidy that it has been providing to customers on liquefied petroleum gas (LPG) and transfer that amount to provide subsidy on electricity.

Minister for Energy, Water Resources and Irrigation Barsha Man Pun informed that the government has already started the process to remove subsidies on LPG. “We are going to forward the proposal to the Cabinet soon and if endorsed then the Ministry of Finance will announce such a decision through the next fiscal year’s budget,” he added.

“The subsidies being provided on LPG will now be stopped and the subsidy amount will be transferred to provide subsidy on electricity to the customers.”

As per a report prepared by the state-owned Nepal Oil Corporation (NOC) — sole importer and distributor of petroleum products in the country — it has been losing an average of Rs 380 million to Rs 450 million per month while providing subsidies on LPG.

Birendra Goit, spokesperson for NOC, informed that the corporation has been incurring a loss of Rs 160 per LPG cylinder.

However, this loss fluctuates depending on the price list forwarded by Indian Oil Corporation — sole supplier of fuel products to Nepal — every 15 days.

Read the full news article on The Himalayan Times.