Kathmandu, Apr 18 (PTI) The Nepal government has cut fuel allowance of its ministries and state-owned enterprises by 20 per cent, as the country battles a foreign exchange crisis and the price of petroleum products sky-rockets globally, officials said on Monday.
The decision was taken at a meeting of the Council of Ministers held on April 13, the Ministry of Finance officials said.
It was decided in the wake of an increasing trade deficit, decreasing rate of remittance inflow and growing pressure on the foreign currency reserve, they said.
“Different ministries, line agencies and the public/state-owned enterprises will have to slash fuel budget from their budget under the same heading by 20 per cent. This decision is not applicable, however, to development projects, peace and security, essential service and the upcoming local level election,” the ministry said in a statement.
The Russia-Ukraine war, which has been going on for over a month now, has resulted in a major spike in global oil prices. Presently, major oil producers Russia, Iran and Venezuela are all facing sanctions.
Tourism-dependent Nepal is experiencing a slump in its foreign reserves after the COVID-19 pandemic brought international travel to a halt.
The cut in fuel allowance is expected to see savings for Nepal Oil Corporation which is selling fuel at subsidised rates and suffering huge losses at the present global rates.
To deal with the forex crisis, the Nepal government has urged Nepalese nationals living abroad to open dollar accounts in banks in the country and make investments.
Nepal has also tightened imports of expensive cars, gold and other luxurious goods to maintain its falling reserves.
Further, the Nepal government is considering declaring a two-day holiday in public sector offices this month to reduce fuel consumption.