Print Edition - 2016-05-10 | MONEY
Fuel import bill halves to Rs52b due to embargo
Oil supplies from the southern neighbour plunged 70 percent from the last week of September till the first week of February.
May 10, 2016-Nepal’s oil import bill has nearly halved in the first nine months of the fiscal year, but fuel still accounts for the largest share of imports. According to the Department of Customs, Nepal bought Rs52.77 billion worth of petroleum products during the review period, down 44.7 percent year on year.
The sharp drop in fuel imports has been attributed to the five-month-long trade embargo when shipments from India were cut off. Oil supplies from the southern neighbour plunged 70 percent from the last week of September till the first week of February.The fall in imports led to a loss of income for the government with revenues from petroleum products shrinking 35.6 percent to Rs12.42 billion. Overall, Nepal’s imports declined 9 percent to Rs520 billion during the review period.
Iron and steel remain the second largest import despite a drop of 20.6 percent. The country imported Rs45.38 billion worth of these metals during the review period.
The trade embargo did not impact imports of electrical machines and equipment so much. Imports of electrical machinery and equipment including sound recorders and reproducers, television image and sound recorders and reproducers slipped a marginal 3.6 percent to Rs40.11 billion.
Former commerce secretary Purushottam Ojha said the data did not reflect actual imports due to the large amount of informal trade between Nepal and India. “The informal trade should be much higher during the time of the trade embargo,” he said.
Imports of vehicles and spare parts saw a positive growth. The country imported autos and parts valued at Rs39.65 billion, up 7.4 percent.
Anjan Shrestha, vice-president of the Nepal Automobile Dealers Association, said motor imports had grown by a significant amount, mainly in the last month of the review period.
“As banks with excess liquidity reduced the interest rate on auto loans, people bought more cars during the last month of the review period.”
Shrestha added that most of the importers were bringing their vehicles that had been stuck in India during the trade embargo.
Traders said that vehicle imports were not affected as they were entering the country through border crossings other than Birgunj, the main entry point which was blocked by the trade embargo and Tarai unrest.
Meanwhile, cereal crops were the top six imports among commodities, according to the customs report. Nepal imported cereal crops worth Rs26.14 billion in the first nine months of the current fiscal year, up 0.5 percent.
Traders attributed the rise in cereal imports to a drop in the summer harvest. Nepal imported edible vegetables worth Rs13.32 billion, up 13.8 percent. Likewise, edible fruits and nuts increased 0.1 percent to Rs7.47 billion. Ojha said that food grain imports had swelled as the government failed to bring effective agriculture policies to boost farm output.
According to the Customs Department, imports of pharmaceutical products rose 43.5 percent to Rs20.25 billion. Likewise, imports of precious and semi-precious stones and jewellery almost doubled to Rs16.72 billion.
Published: 10-05-2016 08:43