Price rises in fuel have forced the Nepal Oil Corporation to halt the importation of diesel, kerosene and petrol from India to Kathmandu and greater Nepal. A spokesman for the company has told the BBC that they have been unable to purchase enough fuel to meet the shortfall and owes India around $50m in existing debts.

As the Nepal Oil Corporation is making a loss on any import transactions, it has appealed to the Nepalese government to raise prices in order to create a profit on sales and allow the company to continue trading.

The government has already given it a loan which is to be used to pay off debt to India during this week. The loan is thought to be around 1.5bn Rupees, or $33.6m.

The price imbalance and shortfall appears to be a direct result of the Libyan crisis as well as tanker strikes and two national holidays in Kathmandu. This has left much of Nepal with 14-hour blackouts, with school children studying by candle light and homes being powered by fuel-powered generators.

Long queues at petrol stations across the capital are becoming commonplace. Government officials are expected to hold crisis talks next week.

Reported by Zeke Lyons.

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