January 24, 2008	Thursday	Muharram 14, 1429

KATHMANDU: Nepal’s government reversed a fuel price hike on Wednesday after two days of nationwide protests and clashes in the capital, a minister said.

“During an informal meeting between the prime minister and other ministers we decided to revoke the price hike,” industry minister Shyam Sundar Gupta said.

The protests began on Tuesday after the government increased diesel prices by nine per cent and kerosene prices by 19.6 per cent.

The price rise was rolled back “taking into consideration people's sentiments and the upcoming elections,” the minister said, referring to crucial polls planned for April 10e.

Protests against the government were staged nationwide and Kathmandu saw dozens of clashes between stone-throwing student protesters and police.

Monday’s late night price hike announcement was the third time the Nepal Oil Corp had boosted prices since October.

The oil monopoly relies on India for all its fuel supplies and the company has been selling products at a loss for years, building up millions of dollars debt to state-owned Indian Oil Corp.

The state-run Nepal Oil Corporation (NOC), which has a monopoly over oil imports, increased prices by up to 20 per cent on Monday to cut its losses and attempt to minimise fuel shortages. It is the second price hike since October.

Digambar Jha, chief of the NOC, said there was no alternative to the hike.

The corporation needs to pay bills worth millions of dollars to the Indian Oil Corporation, the sole supplier of oil to Nepal.

—AFP