Protests erupt across Nepal over fuel price increases

Jan 22, 2008, 9:30 GMT

Kathmandu - Protests erupted across Nepal Tuesday after the government announced price increases of up to 15 per cent on some petroleum products, citing continuing losses on their import and distribution.

Students and labour organization activists burnt tyres and clashed with police in the capital Kathmandu and several other cities and towns across Nepal.

Police said at least two vehicles were set on fire in the capital Kathmandu after protests turned violent and police were forced to charge them with batons.

The Nepalese government increased prices of kerosene and liquefied petroleum gas which are widely used for cooking by as much as 15 per cent.

It also increased the price of diesel by about 10 per cent to 61 rupees a litre (95 cents). Diesel is widely used by most short and long route buses and is likely to impact travellers.

The protests Tuesday brought normal vehicular traffic to a virtual standstill in Kathmandu and along major highways in south-eastern Nepal.

'Price increases are an attempt to put the burden of inefficient state organizations on the common people,' student unions protesting the price hike said in a statement. 'We urged the government to immediately review its decision which has hit the poorer sections of the society the most.'

This is the third time the government has increased prices of petroleum products in three months.

The government says it is forced to increase the prices to pay the debts owed by Nepal Oil Corporation for importing petroleum products from India.

It also said the price of kerosene was raised to prevent it from being mixed with petrol and diesel.

Nepal faced a severe fuel crisis for much of 2007 after the Indian Oil Corporation cut supplies by nearly half when government-owned Nepal Oil Corporation failed to pay nearly 2.5 billion rupees it owed for importing the fuel.

Meanwhile, Nepal Oil said the price increases were dictated by international oil prices.

'Prices of diesel, kerosene and cooking gas were revised because of the increase in international oil prices,' the state-owned corporation said. 'However, we will review the prices if they fall in the international markets.'