Nepal’s energy crisis needs law, not temporary fixes

Every time the price of fuel rises in Nepal, the country performs a familiar ritual. Taxes are cut. Allowances are slashed. A longer weekend is announced. Officials speak of austerity. The nation tightens its belt, waits for the global market to settle, and then quietly returns to exactly the position it occupied before—exposed, dependent, and holding barely ten days of petroleum in reserve.

This is not crisis management. It is a crisis theatre. And we have been performing it, with minor variations, for time immemorial.

The current shock, crude oil prices surging past a hundred dollars a barrel amid conflict in the Middle East, and fuel prices in Kathmandu hitting record highs four times in a single month, is being framed as an external catastrophe, something visited upon Nepal from the outside. That framing is comforting. It is also dishonest. What we are experiencing now is not the cruelty of circumstance. It is the harvest of structural negligence so deeply embedded that successive governments have learned to mistake it for normalcy.

In September 2015, Nepal’s economy was brought to its knees when fuel supply through the southern border was disrupted for nearly five months. Factories shuttered. Hospitals ran short of medicines. Private vehicles vanished from city streets. Black-market petrol changed hands at three times the official rate. When it was over, the reckoning was swift, and the promise was absolute: Nepal would build strategic petroleum reserves sufficient to last ninety days. It was not an ambition; it was treated as a covenant, a debt owed to the eight hundred thousand people pushed below the poverty line that winter.

Today, a decade later, Nepal holds approximately ten to thirteen days of fuel reserves.

That single number, not any trade statistic, policy paper, or diplomatic disagreement, is the true inheritance of every government that has held power since. It is the ledger on which their energy stewardship should be judged. The Lothar terminal is under construction. Expansion plans exist on paper. But construction timelines slip, budgets stretch, and, in the meantime, the country wakes every few years to the same queues outside petrol stations, the same panic, the same ritual of weekend closures and official proclamations.

What makes this particularly difficult to defend is not the vulnerability itself, but Nepal is landlocked, import-dependent, and subject to geopolitical pressures it cannot fully control. These are genuine constraints. The tragedy is that the vulnerability is entirely knowable in advance, and has been for years. Strategic petroleum reserves are not a sophisticated intervention; they are a buffer, the most elementary form of national insurance. Every major fuel-importing economy maintains them. The International Energy Agency sets ninety days as the global standard. India holds approximately twenty-five days and is working toward forty-five. Jordan, similarly dependent on imports, holds sixty days. Nepal, with full knowledge of what ten days means, holds ten days.

There is no technical explanation for this. The argument has never been that reserves are impossible to build. It is that they have never been made a legislative obligation, never written into law with a deadline, a penalty, and a mechanism for enforcement. Every government has treated it as a target rather than a threshold. Targets, in the history of Nepalese governance, have an unhappy tendency to drift.

And here, the sequencing reveals something that ought to trouble us more than it does.

Nepal now exports electricity to its neighbours. The country that cannot keep its petrol stations stocked for a fortnight earns revenue from selling hydroelectric power across international borders. Almost all new passenger vehicles sold here run on electricity. The grid is more than ninety-five per cent renewable. By certain measures, Nepal is ahead of countries with vastly more resources. This is not a small achievement; it reflects genuine and organic momentum in the economy, driven as much by citizens choosing electric vehicles for practical reasons as by any government mandate.

But this momentum is built on an unstable foundation. The energy transition, however real, has not yet reduced Nepal’s vulnerability to petroleum shocks. Diesel still moves nearly all freight. LPG still cooks most meals outside the capital. Aviation, industry, and heavy transport remain entirely fossil-dependent. The country is, in energy terms, mid-crossing—one foot on the old shore, one foot reaching for the new, with the river running fast beneath.

The tactical response, price adjustments, tax relief, demand suppression,addresses none of this. It is the work of a country that has accepted its own fragility as permanent and learned to manage symptoms rather than treat the condition.

The new government arrives with something its predecessors did not have: an unambiguous parliamentary majority and a mandate built explicitly on the promise of structural reform. This is not flattery. It is the language of an opportunity that is both rare and perishable. Political capital of this magnitude does not keep. It is spent on the first hard decisions—or it is spent on nothing at all.

The hard decision here is not complicated. It requires a single piece of legislation: an Energy Security Act that mandates a minimum strategic petroleum reserve of sixty days within three years, establishes an independent monitoring body, and makes non-compliance a matter of ministerial accountability rather than administrative aspiration. Not a target. A floor. Not a policy. A law.

Nepal will face another West Asia crisis. There will be another drought, another border disruption, another geopolitical tremor that sends fuel prices soaring and brings queues back to petrol stations across the valley. The question is not whether that day will come. The question is whether, when it does, the country will again have ten days, or whether it will finally have built itself a margin of survival.

The covenant of 2015 remains unpaid. This government can settle it, or perform the ritual again and leave the debt to the next.

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