Page last updated at 05:23 GMT, Tuesday, 10 June 2008 06:23 UK

Nepal forced to raise fuel prices

A queue of motorcycles outside a petrol station in Kathmandu
Nepal imports its oil from India

Nepal has increased its fuel prices, including a 25% jump in the price of petrol, because of rising oil costs.

Correspondents say rising world prices made the increases inevitable. Previous fuel price hikes in Nepal prompted large-scale protests.

Nepal Oil Corporation, which imports oil from India, warned it was running out of supplies because low prices meant it could not pay its bills.

Corporation chief Digambar Jha told the BBC it was losing $40m a month.

India itself raised petrol and diesel prices by about 10% last week.

The price of petrol in Nepal has risen by 25% or 100 rupees ($1.50) a litre.

The government also increased the price of diesel, kerosene and cooking gas.

Kathmandu resident Shyam Dangol said he had been waiting in a queue at a petrol station for nearly 12 hours with his motorcycle.

"I am really harassed about it but I don't know where to appeal, " he said.

"It doesn't only affect me, it affects all the people of Nepal. My friends are buying fuel at double price."

The BBC's Charles Haviland in Kathmandu says Nepalese authorities have generally shied away from raising fuel prices.

Though they were hiked last October, on at least two other occasions in recent months, price rises prompted large-scale street protests leading the government to hastily roll back the rises.

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