Nepal LPG deliveries normalize after highway bypass
Gas bottlers in Nepal say cooking-gas deliveries to the Kathmandu Valley should normalize from Friday after a disrupted stretch of the Prithvi Highway was bypassed, easing a shortage that had pushed some consumers into the black market and lifted cylinder prices sharply above the official rate.
The development matters because LPG is a core household fuel in the capital, and any interruption quickly turns into a consumer inflation problem, a logistics problem and, in Nepal’s case, a political one. With the alternate route now open, the industry says it no longer needs to force cylinders to be filled outside the valley, reducing transport costs and allowing prices to return to the normal Rs 2,060 a cylinder from Rs 2,165.38, the level that included a Rs 105.38 premium.
The bottlers’ assurance comes after weeks of strain that began when Nepal Oil Corporation moved to full-cylinder deliveries on July 15 and worsened after the August 26 Bhotekoshi-Trishuli flood damaged the Krishnabhir section of the Prithvi Highway, the valley’s main land link. The supply shock was severe enough that some households were reportedly paying as much as Rs 3,000 per cylinder through informal channels, while others queued for hours or days in hopes of securing a refill.
For consumers, the immediate significance is relief from scarcity pricing. For the economy, it reduces a localized but highly visible food-and-energy cost pressure at a time when Nepal remains vulnerable to infrastructure disruptions and transport bottlenecks. For bottlers and distributors, it restores a more normal margin structure after emergency logistics had forced them to pass on higher freight costs.
Investors and market participants will be watching whether the normalization proves durable. The improvement depends on the alternate route remaining open and on the valley’s replenishment cycle keeping pace with demand. Any fresh damage to the highway, or a return of bottlenecks elsewhere on the supply chain, could quickly reintroduce shortages because Kathmandu relies heavily on road transport for fuel delivery.
The broader lesson is that Nepal’s household energy market is still hostage to a narrow set of transport corridors. Even a temporary disruption can trigger a rapid pricing distortion, expose the limits of inventory buffers and create room for black-market activity. If the rerouted LPG bullets continue moving smoothly, the immediate relief should hold. If not, the same logistics weakness could reappear just as quickly.
| Entity | Gains | Losses |
|---|---|---|
| Kathmandu households | ▲Lower LPG costs | ▼Short-term scarcity premium |
| LPG bottlers | ▲Normalized distribution | ▼Emergency transport expense |
| Nepal Oil Corporation | ▲Easier supply management | ▼Pressure from shortage complaints |
| Black-market sellers | ▲Less opportunity | ▼Loss of arbitrage margins |