Oil Prices Surge Amid Middle East Tensions, Concerns Rise Over Fuel Price Hike in Nepal

Kathmandu — Global crude oil prices have surged sharply following military strikes by Israel and the United States on Iran, escalating tensions in the Middle East. Brent crude prices have climbed close to USD 80 per barrel, while U.S. crude futures also recorded a significant increase. The rise in global oil prices has raised concerns about a possible increase in petrol and diesel prices in Nepal, which is fully dependent on petroleum imports from India. Since India imports nearly 88 percent of its crude oil demand, higher international prices could increase its import costs and inflationary pressure, indirectly affecting Nepal’s fuel pricing. However, according to reports, retail fuel prices in India are unlikely to rise immediately, as the government maintains a balancing policy allowing oil marketing companies to absorb fluctuations through profits and losses. Indian retail fuel prices have remained unchanged since April 2022 despite global volatility. Analysts warn that if Middle East tensions worsen and disruptions occur in the Strait of Hormuz — a critical global energy shipping route — transportation, insurance, and logistics costs could increase, potentially putting long-term upward pressure on fuel prices in the region, including Nepal.