Nepal has doubled its aviation fuel prices, triggering immediate concern across the country’s aviation sector as authorities attempt to safeguard supply amid escalating tensions linked to the Iran war, a conflict that downed an F-15 and an A-10 over the Iranian airspace.
The price revision, implemented from midnight Tuesday, directly affects flights operating from Tribhuvan International Airport (KTM), Pokhara International Airport (PKR), and Gautam Buddha International Airport (BWA). Airlines including Nepal Airlines (RA) and Buddha Air (U4) now face significantly higher operating costs as the government prioritizes fuel security over price stability.
The move comes as Nepal Oil Corporation seeks to maintain uninterrupted fuel imports from its primary supplier, Indian Oil Corporation. Officials indicated that the adjustment reflects rising global risks rather than domestic market conditions.
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Fuel Price Surge Across Nepal
Nepal Oil Corporation raised aviation turbine fuel prices by 84.7 percent for international flights from Kathmandu. The increase is even steeper for regional airports, with rates climbing by 116.2 percent in Pokhara and 117.4 percent in Bhairahawa.
The corporation stated that it must ensure timely payments to Indian suppliers to prevent disruptions. Officials warned that delays or defaults could threaten Nepal’s already fragile fuel supply chain.
The sharp price hike highlights Nepal’s dependence on imported fuel and its vulnerability to geopolitical instability. The Iran conflict has intensified concerns over global supply routes, pushing smaller economies like Nepal to act swiftly.
Due to this price hike, Indigo (6E), the biggest carrier in India, also increased infuel surcharge by more then $100 on some routes.
The Civil Aviation Authority of Nepal (CAAN), there has been “a surge in domestic airfare of as much as 50%”, Reuters reported and CAAN’s spokesperson Gyanendra Bhul was quoted as having said:
The increase is because (of) the abnormal situation existing now…and will hurt the passengers. But the airfares will decrease as soon as the fuel prices fall
Impact of Fuel Hikes on Nepalese Airlines
Airlines have begun adjusting fares in response to the sudden spike in operating costs. Industry insiders expect ticket prices to rise significantly, particularly on international routes where fuel expenses form a major cost component.
Domestic carriers are also under pressure as increased fuel prices strain already thin profit margins. Some operators may reduce flight frequencies or reconsider less profitable routes if high costs persist.
Aviation analysts note that the timing is critical, as Nepal’s tourism sector had been showing signs of recovery. Higher airfares could dampen travel demand, especially among price-sensitive passengers.
According to the Civil Aviation Authority of Nepal, the country’s domestic airlines carry over four million passengers annually. The situation has also raised concerns about the safety of more than 1.7 million Nepali workers in West Asia, especially after a Nepali national was killed in a strike in the United Arab Emirates in March.
Supply Security Focus
Government officials defended the decision, emphasizing the need to ensure continuous fuel availability. They stated that maintaining supply stability remains a top priority amid uncertain global conditions.
The Iran war has disrupted market confidence and raised fears of supply bottlenecks across multiple regions. Nepal’s reliance on a single major supplier further amplifies these risks.
Manoj Kumar Thakur, spokesman for the state-owned Nepal Oil Corporation (NOC), was quoted in The Star, as having said:
Aviation fuel prices have increased..We are a landlocked country and we are fully dependent on India for petrol, diesel and LPG. The only way out is reducing consumption…
Authorities acknowledged the burden on airlines and passengers but maintained that preventive measures are necessary. They signaled that price revisions could be reviewed if global conditions stabilize.
Government spokesperson Sasmit Pokharel told reporters that the country resorting to two-day weekends was partially driven by the fuel crisis:
Government offices and academic institutions will remain closed for two days in a week – Saturday and Sunday..Given the present uncomfortable situation caused by fuel supply, the government and educational institutions remain closed for two days
In an effort to curb panic buying, Nepal last month introduced the sale of partially filled cooking gas cylinders while urging citizens to reduce fuel consumption. The deepening shortage has heightened concerns about the country’s tourism-reliant economy, which now faces added strain. Rising aviation fuel costs have already begun to ripple through the travel sector, with airlines responding by increasing fares on both domestic and international routes.