LPG Shortage in Nepal: Industry Chief Exposes Logistical Bottlenecks, Pricing Conflicts, and the Real Causes Behind Kathmandu’s Crisis
13th September 2026, Kathmandu
Discover the real causes behind Nepal’s LPG shortage. Learn how empty cylinder backlogs, freight constraints, and policy friction created Kathmandu’s LPG crisis and what industry leaders demand from the government.
LPG Shortage in Nepal
The Kathmandu Valley and major hubs across Nepal are facing an acute Liquefied Petroleum Gas (LPG) shortage. Consumers face hours in long queues, empty cylinders in hand, while small businesses struggle to maintain regular operations.
Amid mounting public outrage and an intensifying dispute between fuel industrialists and state authorities, Industry, Commerce, and Supplies Minister Gauri Kumari Yadav tendered her resignation.
To understand the reality behind the crisis, Dewan Bahadur Chand, President of the Nepal LP Gas Industry Association, broke down the core issues handling supply chain bottlenecks, price caps, and government coordination.
Is India Stopping LPG Imports to Nepal?
Contrary to widespread public perception, the ongoing crisis is not caused by an import stoppage or supply cuts from India. According to the LP Gas Industry Association, Indian suppliers are currently shipping 10% to 15% more gas than standard monthly demand.
| Key Supply Metric | Normal Volume | Crisis Operating Volume |
| National Monthly Import | ~50,000 Metric Tons | ~60,000 Metric Tons |
| Kathmandu Daily Consumption | ~40,000 Cylinders | 50,000 – 52,000 Cylinders |
| Max Retail Price (Kathmandu) | Set by NOC | Rs. |
| 2,165 per cylinder |
The 17.5 Million Cylinder Backlog
Nepal has an estimated 17.5 million gas cylinders in national circulation. The core mechanism driving the current shortage is a massive accumulation of empty cylinders sitting in households and retail stores. When panic buying strikes, consumers hold onto extra empty units rather than cycling them back to bottling plants. Until these empty cylinders are systematically collected, refilled, and redistributed, adding extra bulk gas imports alone will not instantly resolve retail queues.
Transport & Logistics: Why Gas Deliveries Are Delayed
Getting bottled gas into Kathmandu presents severe physical and infrastructure challenges that limit daily distribution:
Terai Unloading Requirement: Heavy bulk LPG bullets from India cannot navigate the steep terrain into the Kathmandu Valley. Gas must first be unloaded at bottling plants in the Terai region, transferred into individual cylinders, and re-shipped by truck.
Payload Restrictions on 10-Wheeler Trucks: Transporting filled cylinders to Kathmandu relies primarily on 10-wheeler trucks. Due to fragile bridges and degraded road infrastructure, these trucks are restricted to carrying 15 tons per trip instead of their maximum 21-ton capacity. Larger 12- or 14-wheeler vehicles remain banned on key corridors.
Inner-City Distribution Limits: Local bottling units in Kathmandu lack large truck fleets and must rely on small pickup trucks for city deliveries, creating local delivery bottlenecks during peak traffic hours.
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LPG Pricing Breakdown: Transport Adjustment vs. Black Marketing
A major point of contention centers on retail pricing and logistics cost recovery. Industrialists emphasize that Nepal Oil Corporation (NOC) holds sole legal authority to set retail gas prices. Industrialists earn a fixed margin of approximately Rs. 32 per cylinder refilled and sold.
Base Freight Allowance (NOC) : Up to 50 km (Rs. 57.57 / cylinder)
Remaining Distance (Hetauda–KTM): 81 km additional transport
Added Freight Cost (inc. VAT) : ~Rs. 105 per cylinder
Strict Retail Price Ceiling : Rs. 2,165 / cylinder in Kathmandu
Curbing Price Gouging
To prevent speculative pricing, the LP Gas Industry Association issued a strict directive setting the maximum retail price in Kathmandu at Rs. 2,165 per cylinder. Any sale above this ceiling constitutes illegal black-marketing. To eliminate middleman exploitation, the association has also prohibited individual dealers from independently trucking gas directly from Terai factories to the capital.
Industry vs. State: The Call for Macro-Level Government Action
Tensions reached a boiling point during ministry consultations when government officials threatened gas industrialists with legal action and arrest. Chand responded directly:
“If arresting us ensures gas reaches the market, arrest us first—just guarantee the supply. But threats are not a substitute for logistics management.”
Industry leaders highlight that while private operators manage the entire supply chain—from import transport and bottling to storage and retail delivery—state assistance has been minimal. When industrialists requested government transport vehicles to haul 50,000 daily cylinders from Hetauda at base factory rates, officials cited that state agencies possessed only a single operational truck.
Key Policy Demands
Diplomatic Engagement (Macro Level): The Ministry should coordinate directly with Indian authorities via diplomatic channels to temporarily increase import quotas, rather than focusing solely on micro-level factory inspections.
Highway Transit Clearance: Traffic police and district administration authorities must grant night-time highway access along the Tribhuvan Highway for empty returning trucks to accelerate turnaround times.
Outlook: When Will Kathmandu’s Gas Supply Normalize?
Supply is gradually improving. Daily deliveries to Kathmandu have climbed from 44,000 to over 52,000 cylinders, supported by a fleet of roughly 100 dedicated transport trucks.
As key road obstructions clear along major supply highways, industry representatives project that market tightness will ease steadily over the coming days, provided diplomatic and transit coordination remains active.
For more: LPG Shortage in Nepal
