KATHMANDU, July 25: Nepal suffered a trade deficit of Rs 1.454 trillion, a decline of 15.45 percent, in the last fiscal year, thanks to the government adopting measures to check imports citing the depleting foreign currency reserves along with a fall in the income of people due to recession.
The records with the Department of Customs(DoC) show Nepal’s trade deficit in 2021/22 stood at Rs 1.720 trillion. In the last fiscal year, it declined by Rs 266 billion, giving a respite to the country from an outflow of the foreign currency equivalent to the aforementioned amount.
The decline in the trade deficit resulted from a notable fall in the country’s import expenses. According to the DoC, Nepal imported goods worth Rs 1.611 trillion, a decline of 16.08 percent during the review period. The decline in the country’s expenses abroad has been attributed to the government’s imposition of a ban on the import of luxury items that was in place for almost six months in the last fiscal year.
In December 2022, the government lifted the 10-month long ban on the import of luxurious goods. Subsequently, on January 19, Nepal Rastra Bank also removed the provision of up to cent percent cash margin, which the importers needed to maintain against their letters of credit (LCs) while importing goods.
The DoC records show that the imports jumped after the import restrictions were put to an end. Until mid-January 2022/23, the country’s import expenses stood at 792.66 billion. In the six months following the complete removal of the import restrictions, the country imported goods worth Rs 818.34 billion.
The import amount soared mainly in the latter months toward the end of the last fiscal year. As of mid-March of the review period, the import figure was Rs 1.058 trillion, which rose to Rs 1.201 trillion by mid-April. Likewise, it jumped to Rs 1.480 trillion by mid-June. Just in the last one month of the fiscal year 2022/23, Nepal imported goods worth Rs 131 billion.
Along with the imports, the export earning of the country also declined 21.44 percent. Nepal earned mere Rs 157.14 billion from exports last year.
In last one year, the import of petroleum products from the country decreased by 13 percent. According to the Nepal Oil Corporation, in the financial year 2022/23, the import of petroleum products decreased by 13 percent to 27,83,832 kiloliters 0f petroleum (diesel, petrol, kerosene, aviation fuel and LP gas) equivalent to 281 Billion Rupees. In the last financial year 2021/22 – 31,89,716 kiloliters petroleum worth of 308 Billion Rupees were imported.
Revenue of 94 Billion for Fuel import
In one year, 94 billion rupees revenue was collected by importing petroleum products.
For Petrol, Government has collected 25 rupees and 23 paisa on account of Customs and Declaration fee. Similarly, 4 rupees for road maintenance fee, 1 rupee 25 paise for pollution, 10 rupee for infrastructure tax, 20.71 rupee for VAT and 1 rupee 80 paisa for price Stabilization Fund .
Similarly for Diesel, Customs and Declaration fee is 12 rupees, road maintenance is 2 rupees, pollution tax is 1 rupee 50 paise, infrastructure tax is 10 rupees, value addition tax is 18 rupees 75 paise and price stabilization fund is 1 rupee 63 paise was collected.
According to the corporation, monthly 56 thousand 426 kiloliters of petrol, 117 thousand 264 kiloliters of diesel, 1 thousand 83 kiloliters of kerosene, 14 thousand 447 kiloliters of aviation fuel and 42 thousand 681 metric tons of cooking LP gas are consumed in the market.
Top five imports in FY 2022/23:
Petroleum products Rs 278.76 billion
Iron products Rs 43.60 billion
Crude soybean oil Rs 35.58 billion
Coal and related products Rs 27.12 billion
Crude palm oil Rs 25.91 billion