The failure of the state-owned Nepal Oil Corporation to publish its profit-loss report since January is indicative of its lack of public accountability, analysts said.

According to consumer rights activists, the oil monopoly is quick to issue profit-loss statements when it slides into the red to prove its operations are transparent; but when it is raking in profits, it clams up.

They said corruption and mismanagement are endemic at the government company, the country's largest enterprise with an annual turnover of nearly Rs400 billion.

“We don’t make the reports public as the media is always critical of the Nepal Oil Corporation,” said a director of the corporation. “We follow the government’s directive as a government secretary chairs the board.”

On April 1, Nepal Oil’s sole supplier Indian Oil Corporation sent its revised prices for petroleum products. The Indian company reviews export prices of petrol, diesel and kerosene every fortnight, and of other products such as aviation fuel and cooking gas every month.

According to Nepal Oil, it makes a profit of Rs22 on every litre of diesel sold and Rs8 on every litre of petrol sold, as per the new rates.

Consumer rights activists accuse the government entity of profiting at the expense of the Nepali people who are already struggling with near double-digit inflation.

In Nepal, every drop of fossil fuel is imported and it is the key determinant of inflation. Food prices, transport fares, room rents and school fees have all soared to record highs as a result of high-priced fuel.

Constantly rising inflation has played havoc with household budgets and caused anguish to the provider of the family. And to add to the pain, Nepal Oil does not lower prices even when its import costs drop, said experts.

Consumer rights activists say good governance is sorely lacking in Nepal Oil and other public enterprises.

“The government is unaccountable and corruption thrives. The consumers suffer as a result,” said Bishnu Prasad Timilsina, general secretary of the Forum for Protection of Consumer Rights-Nepal.

The consumer rights body said that government instability was another reason why the administration is least responsible to its citizens.

“The corporation’s expenditures are inappropriate, but no one questions them,” Timilsina said. “The commission being paid to petroleum dealers is improper. The government, the corporation and petroleum dealers are dividing the profit from fuel sales among themselves while consumers suffer.”

Inflation-stricken consumers complain that they are hit with a new price hike every time prices of crude go up in the international market, but the state-owned oil monopoly does not respond with the same quickness when it is the other way around.

According to the Nepal Rastra Bank, consumer price inflation increased to 7.88 percent in February compared to 6.24 percent in the same period last fiscal year.

Food and beverage inflation reached 6.19 percent while non-food and service inflation rose to 9.22 percent in the review month.

The higher cost of diesel is reflected in the market in the form of inflation. A rise in the price of petrol does not change the consumer price index, according to experts.

Last July, the Department of Transport Management allowed transport entrepreneurs to jack up bus fares on inter-provincial routes by a sharp 28 percent.

Cargo carriers serving routes in the Tarai and hills were permitted to hike freight charges by 26 and 20 percent, respectively. All public transport and cargo fares are regulated in Nepal. As a result, according to the Nepal Rastra Bank, inflation in transport has increased to 15.58 percent.

When asked why the Nepal Oil Corporation is reluctant to decrease its prices even after record profits, spokesperson Manoj Kumar Thakur said, “We are discussing the issue with the management. We still have liabilities.”

Thakur added, “The price of crude oil in the international market has also dropped. We are considering this.”

According to the oil monopoly, it still owes Rs8 billion to the Indian Oil Corporation and Rs6 billion to the government.

Officials say they have briefed newly appointed Industry Minister Ramesh Rijal about the situation at the corporation.

The last price hike the corporation made was on February 7, when petrol and diesel prices were raised by Rs3 to Rs178 per litre and Rs175 per litre, respectively.

On Monday, the Nepal Oil Corporation reduced the prices. The prices of petrol has been reduced by Rs3 per litre and the diesel and kerosene rates have been reduced by Rs10 per litre each.

With the price revision, petrol will cost Rs175 per litre, and diesel/kerosene will cost Rs165 per litre.

The corporation is not following the government's instruction, announced through the budget statement, to fully enforce the automatic pricing mechanism in petroleum products.

Automatic pricing is currently applicable in petrol and diesel.

The corporation has not slashed prices in line with a fall in the cost of crude, but says prices may rise in the international market again.

On Monday, the price of Brent crude oil jumped by 5 percent to $79.99 per barrel after Saudi Arabia and other members of the Organisation of the Petroleum Exporting Countries announced a surprise cut in their output target, a move that rippled through stock markets and boosted the dollar due to fears about the stickiness of global inflation, international media reported.