Nepal Oil Corporation (NOC) has amended the Petroleum Products Retailers Regulations, 2075, to impose fines of up to Rs 1 million (about €5,800) on fuel stations that suspend operations without valid justification. It is a long-missing enforcement tool that authorities say will curb the artificial shortages that periodically paralyse daily life in Kathmandu and beyond.
Under the newly added provision to Clause 29(G)(10), retailers are now barred from keeping fuel nozzles dry to create a situation where petrol and diesel are unavailable. Penalties escalate with each offence: a first violation carries a Rs 300,000 (about €1,735) fine and a five-day suspension of supplies from NOC depots; a second, a Rs 600,000 (about €3,470) fine and a 10-day suspension; and a third, a Rs 1 million (about €5,800) fine and a 15-day supply cut.
The amendment was rushed through after a familiar pattern played out earlier this week. Anticipating a possible reduction in fuel prices, petroleum dealers declined to lift fuel from NOC depots on Tuesday, a common tactic to avoid buying stock at higher rates just before an expected price drop. The result was a supply crunch that disrupted fuel availability across the country on Wednesday, leaving pumps dry and motorists queuing.
Crucially, officials found there was no clear legal basis to act against the dealers responsible. That gap prompted Minister for Industry, Commerce and Supplies Gauri Kumari Yadav to direct NOC on Wednesday to build a legal mechanism to deter such behaviour. NOC’s Board of Directors amended the regulation the same evening. As a state-owned monopoly importer that supplies fuel to private dealers nationwide, NOC holds significant leverage over retailers, and the corporation says it can now take action against any station found engineering a shortage by shutting down without a valid reason.