Nepal’s economy suffers as it fails to import power as prices rise
Nepal has failed to import electricity from India as electricity prices in the neighboring country have been rising lately.
Most of Nepal’s bids for electricity from India have failed recently because other buyers outbid the Nepal Electricity Authority (NEA). On Wednesday, Nepal was forced to cut power to its industries for several hours, Xinhua news agency reported.
“Electricity prices in India have increased due to rising input costs for thermal power plants to generate electricity amid high fuel prices globally,” Suresh Bahadur Bhattarai told Xinhua. , spokesperson for the NEA.
Nepal is facing the ripple effects of the ongoing tensions between Russia and Ukraine, “as it is forced to pay higher electricity prices than usual market prices”, he added.
The NEA, the only power utility in Nepal, purchases electricity from India during the dry season when Nepal’s hydropower plants produce insufficient electricity due to lower water levels in the rivers. .
In Nepal, the peak hour electricity demand is about 1,600 megawatts (MW), while power plants currently produce about 650 MW of electricity. During the monsoon season, it generates more electricity than it needs and sells the excess energy to India.
As the NEA now pays a higher amount for power purchases than it bills customers, Bhattarai fears a serious consequence for the financial health of the power utility.
Worse is the financial situation of the Nepal Oil Corporation (NOC), the sole importer of petroleum products in Nepal, which is suffering massive losses due to rising prices of gasoline, diesel, cooking gas and oil. other fuels.
While raising oil prices in the country to offset rising import prices, the NOC also continuously subsidizes diesel, gasoline and cooking gas. According to the latest price adjustment on March 17, its estimated fortnightly losses amount to 4.66 billion Nepalese rupees ($38 million).
The NOC is now on track to suffer losses of more than 9 billion Nepalese rupees ($74 million) per month, said Sushil Bhattarai, deputy chief executive of the NOC.
“If this situation continues and we cannot raise fuel prices to compensate for the losses, or if the government does not support us financially, NOC’s solvency will be at stake,” he added.
(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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