Nepal's fuel crisis will push almost a million people into poverty

With a large cone-shaped bamboo basket strapped to her back, Nirmala Bhandari treks two hours every day from her village to a protected forest in the hills, heaving it back filled with enough firewood to cook food for her three children.

Despite knowing timber collection in this forest is illegal and wood stoves cause deadly indoor pollution, the 35-year-old widow says she has no choice since a shortage of cooking gas hit Nepal more than two months ago.

"My children and I spent three days outside a fuel shop for cooking gas but did not get any," she said in a village in Jhor, 12 km (7 miles) from Kathmandu.

"If there is a problem collecting wood then I may have to feed them only alternate meals," said Bhandari, explaining that guards at the Shivapuri National Park have already warned her to stop hacking off tree branches in the fast-depleting forests.

Bhandari's family is among hundreds of thousands in the impoverished Himalayan nation crippled by a shortage of basic commodities after Nepal adopted a new constitution, sparking protests by the Madhesi minority, who say it marginalises them.

Since September, 50 people have died in protests at border points with India, where demonstrators have blocked trucks carrying everything from petrol to medicines from entering the landlocked nation, still reeling from two deadly earthquakes.

The crisis has prompted the United Nations to express deep concern over what it said is a "critical" shortage of lifesaving medicines and fuel, and warns this could put at least three million children at risk of illness in the coming winter months.

Experts say this economic and humanitarian crisis is likely to have a much wider and longer-term impact.

"The fuel shortage will push more than 800,000 people below the poverty line. This is our estimate based on the study of the losses faced by agriculture, industry and service sectors," said Trilochan Pangeni, a spokesman for Nepal's Central Bank. 

"These people are wage earners, marginalised and low income people. We have derived this figure after a detailed and close study in all these sectors. This will hit the economy badly."



In streets of the capital Kathmandu, the crisis is evident.

Thousands of residents line up with empty gas cylinders outside fuel depots every day only to be told that the elusive tankers have not arrived from across the Indian border.

With authorities imposing a ration on fuel, motorists line up in queues stretching more than two kilometers outside petrol stations.

On the black market, petrol and diesel smuggled in jerry cans from India sells up to five times the normal price. The cost of commodities like cooking oil have soared amid fears inflation could hit double digits by the end of the year.

Even ready-to-eat items like noodles have disappeared from the shop shelves.

The fuel shortage has led to buses cutting down services, forcing commuters to sit on roofs. Taxis are no longer an option for many as they can't afford paying six times the normal fare.

Tour operators say the country's key economic pillar, tourism, is already suffering. On average, 800,000 tourists visit Nepal annually, contributing four percent to the GDP.

Domestic airlines have reduced the number of flights, and hotels are offering only fixed menus to beat the fuel shortage.

"How can you expect tourists to come when you don't have fuel even to cook a full course meal for them?" said Jiban Ghimire of the tour operating group Shangri-la Nepal Trek.   

Large and small businesses alike have been badly hit.

The Federation of Nepalese Chambers of Commerce and Industry says more than 2,200 industries producing food items, plastic goods, edible oil, iron ores and cement have closed down, throwing 220,000 workers out of work.

In an empty restaurant on the outskirts of Kathmandu, owner Rupesh Shrestha says he has been forced to give leave to 25 of his 30 employees because they have no gas to cook with.

"Only five of us manage to serve a few of our regular customers who come. We use firewood to cook as there is no cooking gas. I don't know when the situation will improve," said Shrestha.

Wedged between China and India, Nepal is recovering from a decade-long conflict between Maoist rebels and government forces which ended in 2006.

Years of political instability have slowed development efforts and two deadly earthquakes in April and May this year, have further hampered efforts to lift 25 percent of the country's 28 million people out of poverty.

Under these circumstances, central bank spokesman Pangeni says it is the most vulnerable who are hardest hit.

"They are hotel workers forced to stay on leave because hotels have cut down on services due to fuel shortage. Transport workers have lost jobs, rickshaw pullers are out of work," he told the Thomson Reuters Foundation.

"Tens of thousands of people who were self-employed in small pavement businesses like tea and coffee shops, cake shops, street vendors are out of work. All these people have no income."



The government of Prime Minister Khadga Prasad Sharma Oli has offered to amend the three-month-old charter to address some of the key concerns of the ethnic Madhesi protesters.

Several rounds of negotiations between the government and protest leaders have failed amid differences over how to change the internal boundaries of newly created federal states.

Protesters say the entire southern plain region, Nepal's bread basket, must not be split into more than two federal provinces. They now form part of six of the seven provinces dominated by hill dwellers.

Many in Nepal blame India for supporting the Madhesis, who share close familial, cultural and linguistic ties with India, by refusing to divert oil tankers to other border points where there are no protesters.

New Delhi denies the charges saying Nepal should instead resolve its constitutional crisis through talks and create a safe passage for tankers and trucks to roll into the country.

Nepal received 1,000 tonnes of fuel from China to beat the immediate shortage and is negotiating regular imports with Beijing, ending a decades-old Indian monopoly over fuel supply.

Authorities are also distributing wood to some residents and is turning to Saudi Arabia and Bangladesh for fuel supplies.

A power cut for nine hours every day has added to the worsening plight of residents who had switched to induction cookers that run on electricity.

Many power plants as well as development projects have ground to a halt due to the fuel crisis. Even transporting relief materials like warm clothes and blankets to quake victims has been impossible, said aid agencies.

The blockade is also taking a toll on Nepal's health sector, as 60 percent of the country's total drug requirements are imported from India.

Pharmacists say antibiotics and drugs for illnesses such as blood pressure, diabetes, heart and kidney problems, mental illnesses as well as syringes and blood bags are critically low.

Hospitals in Kathmandu have begun delaying surgeries because of a lack of equipment and medicines.

"If it continues for a couple more weeks, patients could start dying," said Mukti Ram Shrestha of the Nepal Medical Association, an umbrella body of doctors across the country.

Humanitarian agencies warned this week that with health care facilities lacking over half of their total essential requirements, the humanitarian implications were "grave".

 A statement signed by four U.N. agencies and other aid groups said the most vulnerable, including pregnant women, the elderly, children and people with chronic conditions such as diabetes and cardiovascular disease were already being affected.

 "Disruptions to public health programs, including routine immunization, will have an extremely serious and lasting impact on the health of children," said the statement from agencies such as the World Health Organization, Britain's Department for International Development and the German Development Cooperation.

"Access to life-saving emergency services, including surgery, intensive care and blood transfusion, as well as referrals of complicated cases, have been severely impacted."

The rising dependence on wood will also increase more indoor pollution and result in a spike in cases of pneumonia.

More than 800,000 Nepali children under five had pneumonia in 2014 and around 5,000 died, said the U.N. Children's Fund, UNICEF.

But for women like Bhandari, with three mouths to feed, using firewood is her only option.

"For now, my priority is to somehow cook meals and feed my children. Everything else comes after that," she said.    

Last update: Fri, 11/12/2015 - 14:57

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