Nepal Grapples with Severe Cooking Gas Shortage Amidst Supply System Disruption

Nepal is currently facing a severe crisis in its cooking gas (LPG) supply, with acute shortages reported across the Kathmandu Valley and other major parts of the country. Despite assurances from the Nepal Oil Corporation (NOC) that international imports remain robust and sufficient, consumers are enduring long queues and significant inconvenience, highlighting a critical breakdown in the domestic distribution system. This situation, if prolonged, could have ripple effects on household budgets, small businesses, and overall economic stability, making it a point of concern for investors monitoring the nation's economic resilience.

The current predicament appears to stem from a recent policy shift by the NOC. In late February 2082 B.S. (mid-March 2025), to alleviate a previous shortage, the corporation had mandated the sale of half-filled (7.1 kg) LPG cylinders. This measure was intended as a temporary relief, ensuring wider, albeit smaller, distribution. However, citing an easing situation, the NOC reversed this decision on Ashar 31 (mid-July), instructing all gas industries to resume selling full-weight (14.2 kg) cylinders. This transition, intended to normalize the market, has paradoxically plunged it into disarray. Consumers report that during this transitional period, gas supply to local depots has virtually ceased, leaving them unable to exchange their empty cylinders and, in many cases, facing the prospect of kitchens running idle. The abruptness of the policy change and the lack of a smooth transition plan are being cited as primary contributors to the current chaos.

The ground reality paints a grim picture. Local gas dealers and depots, once primary points of access for consumers, are now consistently turning away customers with the ubiquitous "no gas" sign. This forces desperate consumers to seek alternatives, leading them directly to the gates of gas industries and main distribution centers. A vivid illustration of this crisis can be seen outside the Nepal Gas Industry in the Balaju Industrial Area, where hundreds of citizens, clutching their empty cylinders, form long queues from early morning, hoping to secure a refill. Similar scenes are becoming commonplace on Kathmandu's streets, with people transporting cylinders on motorcycles, taxis, and even bicycles in a frantic search for cooking fuel, underscoring the depth of the problem and the daily struggle faced by ordinary Nepalis.

The Nepal Oil Corporation, the state-owned monopoly responsible for fuel imports and distribution, maintains that there has been no reduction in LPG imports from the Indian Oil Corporation (IOC), assuring that supplies are arriving at full capacity. NOC officials have suggested that the current scarcity might be an "artificial shortage" orchestrated within the domestic market, possibly by unscrupulous traders or middlemen looking to profit from the disruption. In response to mounting public pressure, the NOC initiated direct gas sales from its old office in Teku, Kathmandu, starting last Saturday. Brands like Nepal, HP, Everest, Sugam, and Shriram are reportedly available there. However, even at this direct sales point, the situation remains dire, with thousands queuing for hours, many ultimately returning empty-handed, indicating that the problem extends beyond mere distribution bottlenecks.

Consumer rights activists have voiced strong suspicions regarding the "artificial shortage" theory. They allege that such disruptions frequently occur whenever there are changes in gas cylinder weight or pricing, suggesting that certain traders and middlemen exploit these transitions to hoard stock and manipulate the market for illicit gains. These activists are vehemently demanding immediate and stringent market monitoring by the government and relevant authorities. They emphasize the need for thorough investigations to ascertain whether depots are indeed hoarding gas and to track the distribution channels from the industries to ensure transparency and accountability throughout the supply chain. Such practices erode public trust and create an unstable market environment.

The NOC continues to appeal to the public not to panic or hoard, asserting that there is no actual shortage of gas in the market. However, this reassurance rings hollow for the average citizen who cannot readily access gas from their local depots. Until the supply chain is stabilized and gas becomes easily available at the neighborhood level, the long queues at industry gates and NOC's direct sales points are unlikely to subside. The confluence of the ongoing monsoon season and this critical fuel shortage is making daily life exceptionally challenging for ordinary Nepalis, impacting everything from household meal preparation to small-scale eateries. It underscores a pressing need for the government to move beyond mere assurances and implement concrete, effective supply chain management strategies to restore stability and confidence in the nation's essential commodity market. For investors, such recurring supply chain vulnerabilities in critical sectors highlight potential operational risks and the need for robust regulatory frameworks to ensure market stability.