Kathmandu [Nepal], May 28: The Nepali government has decided to cut taxes on petroleum products due to rising costs of fuels, a minister announced Friday.
Addressing the House of Representatives, Dilendra Prasad Badu, minister for industry, commerce and supplies, said a cabinet meeting on Monday endorsed a proposal of adjusting the existing taxes on petroleum products to bring down fuel prices.
"The Finance Ministry is undertaking homework to adjust the taxes," he added.
Nepal, which relies entirely on imported fuels, has hiked up fuel prices in recent months in response to prices rising internationally, which in turn have contributed to growing transport fares and inflation in the South Asian country.
The Nepali government has been imposing several taxes on petroleum products, including customs duty, value-added tax, infrastructure tax and road maintenance tax, but it has not made clear how to cut down the taxes.
Despite rising fuel prices, the Nepal Oil Corporation is still facing a loss of 6.71 billion Nepali rupees (54 million U.S. dollars) per month, according to the minister.
On May 22, the corporation reported 47 billion Nepali rupees (378 million dollars) in total loss since the start of the current fiscal year in mid-July 2021.
During the first 10 months of the 2021-22 fiscal year, Nepal had imported petroleum products worth 243 billion Nepali rupees (1.95 billion dollars), according to the Department of Customs.
Badu said that the cabinet meeting also decided to form a task force to study how rising prices of petroleum products are affecting the economy and recommend short- and long-term alternatives to the petroleum products and how to encourage the use of electricity in vehicles and kitchens.
He noted that the government is working on reducing electricity tariffs for students and people below the poverty line to encourage them to use electricity.
Nepal has surplus hydropower in the monsoon season, and the Nepal Electricity Authority has invited bids from Indian buyers for importing 200 megawatt of power from Nepal from July to November.
Source: Xinhua