India on Wednesday lost its long-standing status as Nepal’s sole fuel provider, after the Himalayan nation signed an agreement with China for the supply of petroleum products. The agreement came after shortages caused by the blockade of land routes from India due to unrest over the new constitution.

“Nepal Oil Corporation (NOC) and China National United Fuel Corporation formalized a long-term commercial agreement in Beijing on Wednesday afternoon,” a senior Nepali bureaucrat told TOI.

Under the agreement, the bureaucrat added, China will supply fuel at international rates, which Kathmandu might find cheaper than its imports from India. To begin with, China will fulfill at least a third of Nepal’s requirements.

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Just how effective the Chinese supplies will be remains to be seen as every month, Nepal imports about 2,200 tonnes of LPG. It needs about 15 lakh litres of petrol and 10-15 lakh litres of diesel every day. Nepal spends about Rs 150 billion in Nepali currency to buy fuel from India every year.

Indian officials in Delhi said Nepal was free to act in its interests, though they felt Nepal was to blame for its situation. An official said the ball was still in Nepal's court as India was not responsible for the blockade. “There are sit-ins and protests and only Nepal can address the issues involved. Our truckers are suffering too. It actually seems Nepal itself has given up on the main Raxaul-Birgunj crossing,'' he said, adding Nepal needs to have a relook at its constitution. The official said India was not going to be “prescriptive” about the changes Nepal needed to make in its constitution.

Nepal decided to look beyond India for fuel supply while the two nations were locked in a who-blinks-first game over the Madhesi question.

“Our officials were in talks with China since Tuesday,” the bureaucrat said. “From now on, we do not have to depend on one particular country for fuel,” he bureaucrat said when asked if China alone would be able to fulfill Nepal’s energy requirements. Reports from Nepal, however, said the capacity of the highways from the north needs to be checked in order to ensure steady flow of supplies.

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Disruption in fuel supply from India began following a dispute between Madhesi parties and major national parties over Nepal’s new constitution. Madhesis (Maithili, Bhojpuri, Avadhi and Hindi-speaking Nepalis) want proportionate representation in Parliament and a separate province comprising all 21 Terai districts bordering UP and Bihar. This apart, Tharus, a plains tribe, too are fighting for similar rights. Major parties claim some of the Terai districts have a Pahari majority.

On Monday, an eight-member Nepali delegation had reached Beijing to discuss the modalities of fuel supply. The same day, Chinese foreign ministry spokesperson Hua Chunying had said China would help Nepal as a friendly neighbour to “relieve its shortage of fuel supply”.

In addition, Beijing has agreed to send about 1,000 tonnes of fuel in grant. “This consignment has already reached the Rasuwa-Kerung border point,” the bureaucrat said. NOC is making arrangements to bring the supplies to Kathmandu, latest by this weekend.

Rasuwa-Kerung is one of the six major trans-Himalayan routes connecting Nepal with Tibet. The biggest entry point, Tatopani, 110 km northeast of Kathmandu, suffered heavy damage during the April earthquake.

Nepal’s decision to get oil from China evoked mixed reactions. In Birgunj, on the Nepal-Bihar border where India has a consulate, Madhesi agitators held a demonstration with placards that read ‘China, back off’ and ‘Do not work against Madhesi agitation by supplying oil in Nepal’. In September, burning of a Chinese flag during a Madhesi demonstration had sparked a row in Nepal.

In stark contrast, some sections of hill Nepalis want their new communist Prime Minister Khadga Prasad Sharma Oli to build bigger roads to China, look beyond India for fuel supply and initiate gas and oil explorations within the country itself. Till some time ago, anti-India demonstrations and burning of Prime Minister Narendra Modi’s effigies were regular affairs in Kathmandu.

On top of that, many top Nepali leaders, including Oli, Unified Communist Party of Nepal (Maoist) chairman Pushpakamal Dahal aka Prachanda and his deputy Narayankaji Shrestha, have held talks with various Chinese officials in recent weeks.

“It’s sad that the situation has reached such a pass despite our shared historical, religious, cultural and ethnic ties with India,” the Nepali bureaucrat rued.

Most hill Nepalis, including ministers, have taken exception to blockade of entry points by Madhesi agitators, especially on “das gaja” (no-man’s land between India and Nepal). They derisively call it “India’s undeclared blockade” to force Nepal to amend its constitution in favour of Madhesis. Days before he became PM, Oli too had remarked, “Why should any country be unhappy when we are making a constitution for ourselves?”

Incidentally, the paradigm shift in India-Nepal relations coincided with Vidya Devi Bhandari, a Pahari leader from the ruling Communist Party of Nepal (Unified Marxist Leninist) succeeding the country’s first President Ramvaran Yadav, a Madhesi. She defeated Nepali Congress’s K B Gurung in an election boycotted by Madhesi parties.