The first-ever supplies of oil from China have arrived in fuel-starved Nepal, potentially ending the Himalayan country’s decadeslong dependency for its energy needs on India.
The agreement to import oil from China was signed after energy supplies from India were disrupted amid a deep strain in their ties over Nepal's new constitution.
The tankers from China brought about one-third of the 1.3 million liters of fuel, which is now being supplied as a “goodwill gesture” in the form of grants by Beijing.
More significantly, the Nepali Oil Corp. and National United Oil Corp. (PetroChina) have signed a preliminary deal for uninterrupted supplies from China.
The move is expected to lessen India’s influence in Nepal and increase Beijing’s clout.
Nepal Ambassador to China Mahesh Maskey told a Nepalese television channel that Beijing has agreed to supply one-third of the country’s needs.
Kathmandu turned to China after facing crippling shortages following the picketing of a critical crossing at the Nepal-India border by ethnic Madhesis, who are angry because they feel Nepal's new constitution does not give them sufficient political representation.
Their protests, now in the sixth week, have often turned violent and led to a huge line of trucks waiting at the border.
Although India has not said it openly, it supports the cause of the Madhesis, and wants Nepal to accommodate their concerns.
New Delhi said truckers are not entering Nepal due to worries over safety.
Kathmandu, however, accuses India of imposing an unofficial fuel blockade to back the demonstrators.
Lok Raj Baral, head of Nepal’s Center for Contemporary Studies in Kathmandu, said there is a lot of resentment about the disruption in fuel supplies in Nepal.
“I did not expect this kind of extreme step that India has taken on this issue. We understand India’s concern, but it does not mean that India should impose sanctions on Nepal,” Baral said.
In Nepal, the fuel shortage has led to long lines at fuel stations and a lack of cooking gas in homes. Hospitals, too, are grappling with severe shortages.
Fuel is being sold at prices up to 10 times higher on the black market. The fuel shortage is also hampering earthquake relief work.
For trading routes, Nepal has traditionally relied on India, where flatter crossings ease the flow of imports and exports.
In contrast, getting fuel from China is much more challenging, as the crossings with its northern neighbor are across a much more mountainous terrain.
Tanker driver Gyan Bahadur Tamang said, “The road on the Nepal side is very bad, the road on the Chinese side is better. If the road was renovated with better facilities, we could transport [fuel] easily and continuously.”
Indeed, Nepal’s dependency on India will not end anytime soon.
Nepalese Prime Minister K.P. Sharma Oli has also said the country’s decision to get fuel from China does not represent a change in its foreign policy.
However, Kathmandu’s move to turn to Beijing at a time when it feels squeezed by New Delhi is seen as a diplomatic setback for India, which is competing with rival China to gain influence in South Asia.