KATHMANDU — Nepal has joined its South Asian neighbors in implementing emergency energy measures as the blockade of the Strait of Hormuz triggers a severe petroleum shortage across the continent. With the international benchmark for Brent crude hitting $115 per barrel, the landlocked nation—which is entirely dependent on imports via India—is facing a dual crisis of supply scarcity and record-breaking inflation.

The Details: Mandatory Rationing and Market Shifts

The Nepal Oil Corporation (NOC) has officially moved to stabilize dwindling stocks by introducing strict rationing protocols for households and motorists:

• Cooking Gas Quotas: Households are now restricted to purchasing half-filled (7.1kg) cylinders of Liquefied Petroleum Gas (LPG) to ensure equitable distribution amid panic buying.

• Fuel Price Spikes: In a single 10-day window, the price of petrol jumped by Rs. 30 per litre, reaching a historic high of Rs. 187, while diesel rose to Rs. 167.

• Transportation Curbs: The government is preparing to reintroduce the "Odd-Even" vehicle rationing system (based on license plate numbers) to reduce national consumption by an estimated 20%.

Hydropower as a Strategic Buffer

Unlike its neighbors who rely heavily on oil-fired power plants, Nepal is leveraging its hydropower potential to mitigate the shock. The Nepal Electricity Authority (NEA) reports a 15–20% surge in electricity demand as urban kitchens rapidly pivot from gas to electric induction stoves. While Nepal is currently managing the load through cross-border trade with India, officials warn of potential four-hour daily power gaps during evening peaks throughout April until the monsoon snowmelt increases domestic river flows.

The Remittance and Food Security Risk

Beyond energy, the conflict poses a structural threat to Nepal's economy:

• Remittance Vulnerability: Approximately 40% of Nepal’s total remittances (roughly Rs. 444 billion so far this fiscal year) originate from the Gulf region. Analysts at Nepal Rastra Bank warn that a prolonged conflict could disrupt the livelihoods of millions of migrant workers.

• Food Inflation: The cost of imported essentials has spiked; rice prices have risen by up to Rs. 100 per sack, and sunflower oil has jumped to Rs. 300 per litre due to surging shipping and fertilizer costs.

Fact Sheet: Nepal’s Energy Crisis at a Glance

Nepal Limits Cooking Gas Sales as Shortage Hits Households

This report highlights how the regional energy shortage is forcing Nepal to accelerate its transition toward a hydropower-based economy to reduce its dependence on volatile Middle Eastern oil routes.