The Nepalese government has slashed fuel allocations for its ministries and state-owned enterprises by 20% as the country grapples with a currency crisis and the price of petroleum products soars around the world, officials said on Monday. .
The decision was taken at a cabinet meeting held on April 13, finance ministry officials said.
The decision was taken following a growing trade deficit, a declining rate of inflow of funds and increasing pressure on the foreign exchange reserve, they said.
“Different Ministries, Line Agencies and Public/State Enterprises will have to cut 20% of the fuel budget from their budget under the same heading. This decision, however, does not apply to development projects, peace and security, essential services and upcoming local elections,” the ministry said in a statement.
The Russian-Ukrainian war, which has been going on for more than a month now, has led to a spike in global oil prices. Currently, major oil producers Russia, Iran and Venezuela are all facing sanctions.
Tourism-dependent Nepal is seeing a drop in its foreign exchange reserves after the COVID-19 pandemic brought international travel to a halt.
The reduced fuel allocation is expected to result in savings for the Nepal Oil Corporation, which sells fuel at subsidized rates and suffers huge losses at current global rates.
To deal with the forex crisis, the Nepalese government has urged Nepalese nationals living abroad to open dollar accounts in the country’s banks and make investments.
Nepal has also reduced its imports of expensive cars, gold and other luxury goods to keep its reserves dwindling.
In addition, the Nepalese government plans to declare a two-day holiday in public sector offices this month to reduce fuel consumption.
(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)