By Usman Khan

Constantly increasing fuel prices in Nepal have a direct effected on the cost of living and essentials. The rising cost of fuel has become part and parcel of everyday life, but the price jump that occurred recently left Nepalese speechless. The oil domination raised the prices of petrol and diesel by Rs21 per liter each and kerosene by Rs27, which is the sharpest increase in living memory. Motionless salaries and cumulative price rises have been a periodic feature for all and sundry.

This has had a devastating result on economies imagining to restore back after months of uncertainty. With the recent hike, the price of petrol has reached Rs199 per liter, and diesel and kerosene now cost Rs192 per liter each. At a time when the government’s focus should be on increasing economic output, the recent hike will certainly diminish economic activity.

The unreasonable rise in fuel prices could be attributed to the government’s fear to raise internal revenue, which would otherwise be obtained from duty levied on imports. The avenue of raising revenue from import duty has virtually come to a standstill. The rising prices is tantamount to squeeze every little penny from the already miserable public.

Continually growing fuel charges have a direct effect on the cost of essentials. And this variation inclines to endanger domestic finances producing agony in to masses. It is certainly worse for people working on a daily wage basis.

The current global crisis may be part of the problem, but the major reason is the deplorable condition of the foreign exchange reserves, negligible focus on exports over the years previous the pandemic in Nepal. The widespread joblessness causing from the cold-hearted approach of consecutive governments to handle the Nepalese economy.

The country is founding itself in the central of a financial collapse, and policymakers have not the courage to face it as growing problem which reflects their incompetence and indifference more than anything else.

The pressure has since been mounting on the retailers and the feeble output sector, who have no other recourse than to meet the expected targets by relying on imports. However, with other countries tightening exports of essentials, productivity can be expected to take a hit in the ensuing months adding to the existing anguish.

As the national and provincial elections looming, the government should bring measures that uplift the tattered public confidence by easing the financial burden. However, the current steps initiated by the policymakers show astute political acumen and understanding of general psychology. It shouldn’t come as a surprise if the price hike is down to more acceptable levels as the government is closer to the elections scheduled for the end of November.

The means to hold on to power by manipulating various instruments at their disposal is an old trick mastered over the years. What is necessary is sound economic policies within a medium- to the long-term timeframe. Economic success does not happen on a whim; it requires utmost dedication, mainly from those at the helm of affairs.

High prices is the main hindrance in the way of industrial progress. As the high cost of capital; bank rates are high and bank financing is difficult to get due to a lack of liquidity in the banking system. The second one is the lack of infrastructures, like roads, electricity, etc., for industries.

The land is another big hindrance at present. Land prices have hit a lot in the industrial sector and it is becoming difficult for them to acquire land for the industries. The procedural hurdles are quite a nuisance. There are numerous issues related to tax that get in the way of industrial growth in Nepal.

To overcome these problems, there are some effective solutions. The first one is to facilitate the industries with a continuous supply of electricity at a certain rate. The government should deliver electricity at reasonable rates during the rainy season. To address the problems in land acquisition. The government should also get rid of procedural hurdles while respecting the industrialists and acknowledging their contribution to the private sector.