PHOTOGRAPH: AMARJEET KUMAR SINGH/SOPA IMAGES/ZUMA PRESS/EYEVINE
AFTER INDIA imposed a five-month unofficial blockade in 2015, Nepal’s government promised to build strategic petroleum reserves. Eleven years later, the country still holds barely ten days’ worth of fuel. That number is the truest measure of how little has changed—and how much is at stake.
Nepal imports every drop of its petroleum from India. Diesel, petrol, kerosene, aviation fuel and LPG for cooking all flow through the Indian Oil Corporation under an exclusive arrangement that dates back to 1974. The Motihari–Amlekhgunj pipeline, expanded as recently as 2025, has made that relationship more efficient and more dangerous. A single chokepoint, once built, is hard to unbuild.
The structural mathematics are unforgiving. In the first eight months of the current fiscal year, Nepal spent Rs82bn on diesel alone, or 6.4% of total imports. Over a five-month period ending in December, the fuel import bill of Rs121bn surpassed the country’s total export earnings of Rs116bn. Remittances from Nepalis working abroad cover the gap, but those dollars buy fuel before they buy anything else. When global crude prices rise, Nepal has no cushion. The 15-day pass-through mechanism from IOC means that a spike in the Middle East reaches a Kathmandu petrol pump within two weeks.
Storage is the weakest link. Nepal holds some 71,000 kilolitres, enough for ten to thirteen days of normal consumption. The International Energy Agency recommends ninety days. Japan holds two hundred. Even landlocked Laos, with no formal strategic reserve, has more supply options through Thailand and Vietnam. Nepal has the Himalayan passes, which are closed for months each year, and a Chinese offer to donate fuel that cannot be delivered at scale. The 2016 agreement to explore petroleum cooperation with Beijing has produced exploratory drilling in Dailekh but not a single commercial shipment across the northern border.
The 2015 blockade showed what happens when the assumption of normalcy breaks. Indian authorities denied any official stoppage, but fuel flows fell by more than 90% for several months. Hospitals rationed generator fuel. Transport ground to a halt. The government survived only because India eventually relented. A more severe disruption—a refinery outage in Bihar, a domestic fuel crisis in India, a prolonged flare-up in the Strait of Hormuz—would exhaust Nepal’s reserves within weeks. After that, the choice would be between accepting Chinese fuel with political strings attached or capitulating to whatever terms New Delhi set for resumption.
That prospect already shapes Nepali foreign policy, even in peacetime. Every decision on hydropower licensing, every signal towards Beijing, every vote in multilateral forums is taken with a background calculation: how will New Delhi react, and what might that mean for the next tanker shipment? This is not coercion in the crude sense of an explicit threat. It is a structural dependency doing its silent work.
Some argue that the rapid adoption of electric vehicles is loosening the knot. In 2024 electric vehicles made up 76% of new passenger car sales in Nepal, a higher share than almost anywhere else. That is a commendable achievement. But EVs displace petrol, not diesel, and the heavy trucks that move goods across the hills still run on fuel from India. LPG imports for cooking have jumped by 2,466% over two decades. No electric induction programme has scaled to replace that. The vehicle fleet turns over slowly. The dependency continues.
India does not need to be a hostile neighbour for this to qualify as a national security crisis. It just needs to be a rational actor that prioritises its own citizens when supply tightens. Nepal’s entire energy architecture assumes that India will never face that choice. Ten days of storage is a bet against geography and politics. After eleven years of broken promises, that bet looks like resignation rather than strategy. ■
