Petroleum imports rose in the fifth month of the fiscal year after India loosened its stranglehold on shipments for the first time since imposing a devastating trade embargo on September 22.

The Trade and Export Promotion Centre (TEPC) said oil flows swelled to Rs4.45 billion during the period mid-November to mid-December after having sunk to Rs1.97 billion and Rs1.53 billion respectively in the previous two months.

Nepal’s fuel supply was slashed by about 90 percent following the Indian embargo which began two days after the new constitution was promulgated, apparently as an expression of its displeasure over some of the provisions in the document. Shipments have now increased to 33 percent

of pre-blockade levels, Department of Customs (DoC) said.

Deputy Director General of the DoC Damodar Regmi said that more than 100 oil tankers were entering the country daily compared to 300 tankers in the past.

Fuel imports fell to an all-time low during the period mid-July to mid-December due to the Indian trade embargo. Shipments totalled Rs19.8 billion compared to Rs53.16 billion during the same period in the last fiscal year.

The resulting shortage has not only affected normal life but also development projects, industrial operations and the service sector. The economic slowdown has prompted the government to revise downward the projected growth rate from 6 percent to below 2 percent.

As a result of the continuing embargo, Nepal’s total imports plunged 33 percent to Rs214.44 billion during the first five months of this fiscal year.

As customs duty is the main source of revenue for the government, collection shrank 36 percent to Rs47.62 billion. Overall revenue collection fell short of the goal by Rs50 billion while customs revenue missed the target by Rs29 billion during the review period, the Finance Ministry said.

Along with a decline in oil shipments, other key imports which account for a large share of the government’s revenue collection have fallen sharply. According to the DoC, imports of autos and spare parts dived 39.4 percent to Rs12.76 billion. Iron and steel shipments also plunged 40.5 percent to Rs16.01 billion.

According to Regmi, petroleum and vehicle imports are the two largest contributors to customs revenue. “A massive decrease in their imports has affected revenue collection at the customs offices,” he said.

According to the DoC, there has been improvement in overall imports after India relaxed sanctions with the government deciding to address the demands of the agitating Madhesi parties and talks between the two sides heading in a positive direction.

Regmi said that around 1,000 trucks were presently entering Nepal daily which is a big jump from the few hundred trucks daily when the embargo was in full force. In happier days, around 2,000 goods-laden trucks would be rumbling across the border into Nepal daily.

No formal imports of goods have taken place through the customs offices in Birgunj, Rajbiraj, Gaur, Sarlahi, Jaleshwor, Janakpur and Krishnanagar, according to the DoC. Birgunj accounts for 60 percent of the total imports and 50 percent of the total customs revenue collection.

According to Regmi, revenue collection at the customs offices has improved with a rise in cargo traffic. Revenues have increased to more than Rs400 million daily, but still well below the Rs500-600 million daily in the past.