NEW DELHI, Jan 29: State-run Indian Oil Corp has threatened to cut fuel supplies to landlocked Nepal by 30 per cent if its national oil company fails to pay overdue bills as promised, a report said on Monday.

The Indian Oil board is set to consider the fuel supply cut unless state-run Nepal Oil Corp makes additional payments of 150m rupees ($3.3m) a month to clear bills amounting to $75m, the Indian Express daily said.

“The outstandings are being closely monitored and in case Nepal Oil Corporation fails to make payments of a minimum 150 million rupees every month a cut of 30pc in supplies will be applied,” the newspaper said citing the proposal before the board.

Nepal imports about 11,760 barrels of oil products such as diesel and gasoline daily, mainly by tanker trucks across its southern border with India, according to US government figures.

Indian Oil is the sole supplier to Nepal, sandwiched between China and India.

Indian oil cut supplies by 20pc in Nov, after which its Nepal counterpart said it would pay additional money to clear the dues.

Those cuts have already caused a pinch in the availability of fuel in the Kathmandu Valley this January, according to Nepal news portal Kantipur online.—AFP