Nepal Oil Corporation Keeps Fuel Prices Unchanged Despite Higher IOC Rates

Nepal Oil Corporation (NOC) has decided to keep domestic petroleum prices unchanged despite a significant increase in the purchase price received from the Indian Oil Corporation (IOC), citing the difficult circumstances created by the recent floods in the Bhote Koshi River and the broader impact of natural disasters.

According to NOC, the corporation received a new purchase price from IOC on September 16, 2026, under which the price of petrol increased by Rs. 12.40 per litre and diesel by Rs. 4.68 per litre. However, the NOC Board of Directors decided not to pass the increased cost on to consumers, considering the extraordinary situation caused by the Bhote Koshi floods.

The unchanged prices have been effective from 12:01 a.m. on September 16, 2026. The corporation said the decision was taken despite its inability to fully implement the automatic pricing mechanism in recent months due to fluctuations in international petroleum prices amid the ongoing conflict in the Middle East.

Under the revised decision, the retail prices of petroleum products remain unchanged. Petrol and diesel/kerosene are priced at Rs. 197.50 per litre in the first category, Rs. 199 in the second category, and Rs. 200 in the third category.

The first category covers Charaali, Biratnagar, Janakpur, Amlekhganj, Bhalwari, Nepalgunj, Dhangadhi and Birgunj. Surkhet and Dang fall under the second category, while Kathmandu, Pokhara and Dipayal are classified under the third category.

Meanwhile, NOC has revised the price of liquefied petroleum gas (LPG) for consumers located within 50 kilometres of LPG industries. The price of a 14.2-kg LPG cylinder has been reduced from Rs 2,165 to Rs 2,060, allowing consumers within the specified distance to purchase a cylinder for Rs 2,060.

NOC has also maintained the price of domestic aviation fuel at Rs 249 per litre. The price of aviation fuel for international flights has been fixed at US$1,697 per kilolitre for Kathmandu.

The decision to maintain existing prices is expected to place significant financial pressure on NOC. The corporation estimates that it will incur a loss of approximately Rs. 1.9169 billion over 15 days if retail prices remain unchanged while international petroleum prices continue to rise.

NOC stated that the loss has resulted from maintaining domestic retail prices despite the higher import cost from IOC. The corporation has effectively chosen to absorb the additional cost rather than immediately transfer it to consumers during the current crisis.