Kathmandu: Nepal's state-owned fuel monopoly hiked prices late today in a bid to help ease oil supplies in the Himalayan nation where consumers have been hit by shortages for months, officials said.

Mukunda Prasad Dhungel, deputy general manager at Nepal Oil Corporation, told AFP the price of kerosene would go up by 27 per cent, petrol and diesel 25 per cent, and cooking gas nine per cent from midnight today.

"We have decided to increase the price here in Nepal to keep pace with international cost raise that is continuously increasing," Dhungel said.

Consumers in Nepal have been severely hit by fuel shortages since last year.

"We had extremely low fuel in stock and (we) were buying a lot less than what was in demand every day. The imbalance in buying and selling was the reason we were running out of petroleum products," the oil corporation official said.

Nepal Oil sells fuel products below cost in the impoverished nation and as a result has recorded average monthly losses of 38 million dollars every month.

Dhungel said that even with the price hikes the company would still lose 21 million dollars monthly.

"The government has already made serious efforts to give Nepal Oil corporation tax deductions. The only solution was a painful hike in pump prices," Dhungel told AFP.

Today s announcement is the fourth time the company has raised prices since October.

Earlier this year, the country nearly ran dry and the government increased prices but was forced to later cancel the hikes after nationwide protests.

Landlocked Nepal has no oil reserves and relies on its giant southern neighbour India for all its fuel supplies.

Source : PTI