Energy crisis fuels trade deficit

KATHMANDU, JUNE 1: 

The country has been investing billions just to fulfill its energy needs by importing alternative means of energy.

The country has been reeling under massive power outage since the last couple of years. “The demand for inverters, UPS, batteries, generators and solar has skyrocketed in recent years due to frequent load-shedding,” said hydropower entrepreneur Gyanendra Lal Pradhan.

Nepal will have to bear at least Rs 30 billion just to import alternative means of energy in current fiscal year, he said, adding that the calculation of Federation of Nepalese Chambers of Commerce and Industry has showed that the country has to import diesel worth Rs 18 billion to generate energy for industrial purpose,” he said, adding that Rs 5 billion has been invested just to import generators.

Similarly, the country spends a total of Rs 4 billion to import batteries and the same amount to buy electricity from India, according to him. Equipment worth Rs 1 billion are imported to generate power from solar, he added.

Import of petroleum products has also increased each consecutive year due to power outage. “It is estimated that fuel imports will touch Rs 100 billion in the current fiscal year,” he said, adding the amount will swell to Rs 120 billion in next fiscal year due to continuous rise in demand.

It is a known fact that the cost of generating energy using fuel is expensive as compared to hydropower, said Pradhan. “But, industries are compelled to use diesel and other alternative means due to power shortage.”

The government should encourage small scale hydropower projects to address the problem of power scarcity since the import of alternative means of energy is not a long-term solution to the energy crisis that the country has been facing, he said.

By third quarter of current fiscal year, Nepal has seen a whopping trade deficit of Rs 284.6 billion as it has exported only Rs 55.24 billion worth merchandise but imported Rs 339.84 billion worth merchandise, said the central bank that has revealed the total trade deficit of Rs 307.53 billion.

Source: THT