Nepal’s state-owned oil monopoly on Wednesday sharply increased aviation fuel prices to a historic high, citing soaring global energy costs triggered by the ongoing conflict in the Middle East.

The Nepal Oil Corporation said aviation turbine fuel (ATF) prices for international airlines surged by 77.63 percent to $1,716 per kilolitre in Kathmandu, with comparable increases reported in other major cities. The previous highest rate was recorded on June 19, 2022, when ATF was raised to $1,645 per kilolitre.

Similarly, ATF prices for domestic carriers jumped by 97.63 percent to Rs251 per litre (around $1.65), marking an unprecedented rise in the country’s aviation fuel costs. The earlier peak was on September 1, 2022, when prices reached Rs190 per litre.

“This is the biggest hike in aviation fuel prices in history,” said Manoj Kumar Thakur, spokesperson for the corporation, attributing the surge to reduced global production and heightened demand.

Aviation turbine fuel constitutes a significant portion of airlines’ operating expenses, and sustained price increases are likely to translate into higher airfares, affecting both domestic and international passengers.

Domestic carriers are required to revise fuel surcharges when prices rise or fall by Rs4 per litre under the formula set by the Civil Aviation Authority of Nepal.

According to an airline official, the fuel surcharge on the Kathmandu–Dhangadhi sector, the longest domestic route, may rise by Rs5,000, while the surcharge on the Kathmandu–Simara route, the country’s shortest, could increase by Rs1,500.

If the surcharge is adjusted into the government-controlled airfare, a one-way ticket on the Kathmandu–Dhangadhi route could reach Rs22,000, while fares on the Kathmandu–Simara sector may climb to Rs5,500.

“It’s the biggest hike ever,” said Anil Manandhar, corporate director at Shree Airlines. “This will not only impact passenger numbers but also the airline business.”

The latest revision follows two recent increases in petrol and diesel prices within the past month, underscoring mounting pressure on Nepal’s energy sector amid global supply disruptions.

The oil utility said that international petroleum prices have been rising over the past month due to the West Asia conflict.

Based on purchase prices received from the Indian Oil Corporation, the automatic pricing mechanism has not been able to fully adjust domestic prices, resulting in losses of Rs5 billion over a 15-day period from March 16 to March 31.

According to new purchase rates received on March 31, the price of petrol has increased by Rs41.60 per litre, diesel by Rs94.93 per litre, aviation fuel by Rs123.8 per litre, and LPG by Rs190.36 per cylinder.

Previously, on March 25, 2026, the corporation had adjusted retail prices by only Rs15 per litre for both petrol and diesel.

“However, due to the inability to adjust prices based on the March 16 purchase rates, the corporation is incurring losses of Rs47.12 per litre on petrol, Rs133.45 per litre on diesel, and Rs416.37 per cylinder on LPG,” the corporation said in a statement.

With continued increases in international petroleum prices and limited room for domestic adjustment, the corporation projects a monthly loss of Rs13.21 billion.

Although supplies from the Indian Oil Corporation are being received as per demand, delays in timely payments could affect supply management, the corporation warned.