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Kathmandu Sunday January 20, 2002 Magh 07 2058.
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Demand for diesel and aviation
fuel slumps
By Prem Khanal
KATHMANDU, Jan 19: In yet another strong
indication of dwindling Nepalese economy along with global slowdown, the total demand of
diesel and aviation fuel registered a double-digit shrunk for the first time in the
history of Nepal.
According to the data made available by Nepal
Oil Corporation (NOC), the total sale of diesel, one of the major industrial inputs
recorded a slump of 11.67 percent during the first half of the current fiscal year as
compared to the same period last year. The overall demand of diesel, during the first half
remained at 136,089 kiloliters against 154,077 kiloliters observed last year.
The main cause of the slump in the demand of
diesel consumption is the shrinking economy of the country. According to an estimate, over
80 per cent of the total national demand of diesel is solely consumed in transportation,
which ultimately depends on the domestic economic and industrial activities.
"Since demand for diesel is closely
correlated with the industrial activities, the slumping economic activities in recent
months is one of the influential factors for such decline," Dr Prakash Sharan Mahat,
Chief Economic Advisor to the Prime Minister said.
There are already widespread reports that the
business transactions of trucks and other public transportation have slipped to a record
low level. Squeezing industrial activities particularly due to the ongoing sluggishness in
the real estate business is one of the prime factors for dropping demand of vehicles
ferrying goods.
The situation is more serious in case of the
passenger bus businesses. The number of passenger travelling in the short-route buses as
well as the long-routes ones are reported to have declined in recent months. The downturn
in most of the labour-intensive industries like carpet, ready-made garment and pashmina
products, that has absorbed around half a million people in the valley alone, are the main
reasons for the dwindling number of bus passengers.
Similarly, the most alarming downfall has been
witnessed in consumption of aviation fuel, which clearly indicates that tourism sector has
been hard hit by the continuously sliding numbers of tourists. NOC statistics shows that
the demand of aviation fuel, during first half, has recorded a nosedive of over 25 per
cent to 26,043 kiloliters from 35,160 kiloliters. Similar, decline of over 14 per cent was
also recorded during the first quarter of the current fiscal year.
However, despite the decline in the diesel and
aviation fuel consumption, the total sales of petroleum products, during the period,
recorded a nominal soar of 1.46 per cent to 408,997 kiloliters from 403,099 kiloliters
last year propelled mainly by the surge in demand of kerosene and cooking gas.
During the period, the total sale of kerosene,
the prime cooking fuel for majority of the middle class households, increased by almost 16
per cent against 7 per cent recorded during the first quarter. The total sale of kerosene
touched 180,031 kiloliter up from last year’s 154,798 kiloliter.
The continuing shift of rural households towards
the use of kerosene from traditional firewood combined with continuing illegal outflows
towards India due to the price difference are the causes of such soar.
Beside, NOC officials also argue that the
increasing use of kerosene as an alternative fuel in the diesel vehicles is another factor
for the surge. There were reports that local administration, particularly in the Terai
area had caught dozens of trucks and busses for using kerosene instead of diesel.
"Since kerosene has been subsidized for the households cooking purpose, we can’t
allow its use in transportation for the commercial purpose," says Madan Raj Sharma,
Executive Director of NOC.
Similarly, the sale of petrol during the period
increased by 5.9 per cent to 31,052 kiloliter from 29,322 recorded during the like period
last year. Rapid increase in the number of private cars and motorbikes in the urban areas
is the main cause for such sore.
Similarly, a remarkable surge in the consumption
of liquefied Petroleum Gas (LPG) was also witnessed during the period. The sale of LPG has
gone up by over 23 per cent to touch 23,165 tons from 18,778 tons last year.
The growing popularity of LPG use in the upper
middle class along with the soaring numbers of gas-powered vehicles is the cause of such
increase.
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