Nepal Cuts Fuel Prices by Up to 17% After Middle East Tensions Ease

KATHMANDU, July 1 (Reuters) - Nepal rolled back fuel prices by up to 17%, an official statement said on Wednesday, as the Himalayan nation responded to a fall in global prices following progress towards ending the war in Iran.

State-owned Nepal Oil Corporation (NOC), the sole importer and distributor of fuel products in the country, reduced the retail prices of petrol by 9.2%, of diesel by 13.3% and of cooking gas by 4.6%.

Jet fuel prices for the domestic sector have come down by 14.8% and for the international sector by 14.47% from Kathmandu, by 16.9% for jets ⁠operating from Pokhara and by 17.04% from Bhairahawa, it said.

Oil prices have retreated sharply from recent highs as fears of supply disruptions in the Middle East eased on hopes that U.S.-Iran peace talks would help sustain a fragile ceasefire and restore normal crude flows through the Strait of Hormuz.

Both Brent and U.S. West Texas Intermediate benchmarks are now close to where they were trading on February 27, the day before the start of the U.S.-Israeli war on Iran, when Brent closed at $72.48 a barrel and WTI closed at $67.02.

NOC said the move followed lower supply prices quoted by Indian Oil Corp, the only supplier of fuel to Nepal, received on Tuesday. "This is due to the improvements of fuel prices in global market," it said in a statement.

The new rates were effective from Wednesday.

Nepal increased petrol and diesel prices in April, and ⁠started ​rationing cooking gas in March due to supply disruptions because of the Iran war.

Wedged between India ​and China, Nepal is fully dependent on imports for fuel supplies.

(Reporting by Gopal Sharma; Editing by Aftab Ahmed and Raju Gopalakrishnan)