Nepal signed MoU with China to ease fuel crisis


Who: Nepal
What: Signed MoU with China
When: 28 October 2015
Why: To ease fuel crisis

Nepal on 28 October 2015 signed a Memorandum of Understanding (MoU) with China in order to ease fuel crisis in the country by importing all kinds of fuel. The MoU was signed between Nepal Oil Corporation (NOC) and China National United Oil Corporation (PetroChina) in Beijing.

This will be the first time that China is commercially supplying petroleum to Nepal. Moreover, China has also agreed to donate 1.3 million litres of petrol to Nepal earlier.

With this, the long-held monopoly of India in supplying fuel to Nepal ended. Annually, Nepal used to buy around 1.3 billion dollars of gasoline from the Indian Oil Corporation (IOC).


Nepal completely relied on India for its trade due to favourable geographic conditions which eased the transportation links with India compared to the mountainous terrain of the northern routes bordering China.

But the movement of cargo has slowed to a crawl in recent weeks, with hundreds of protesters blocking a bridge crossing in the town of Birgunj, around 90km south of Kathmandu since 24 September 2015. Scores of trucks have been stranded at a key India-Nepal border for more than a month.