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Dechen Dolkar

Petrol price increased by Nu 1.57 per litre and diesel by chhetrum 59 per litre from midnight after the independent fuel pricing committee reviewed the appeal on the domestic fuel price model.

At Lungtenzampa, Thimphu petrol now cost Nu 92.92 and diesel Nu 109.78.

The independent fuel pricing committee comprising members from different sectors reviewed the appeal from the fuel dealers and department of trade. The   recommendations was submitted to the ministry of economic affairs.

Lyonpo Loknath Sharma said that the ministry decided to endorse the recommendations of the committee.



The domestic price module is a price mechanism for fuel that is charged by the local fuel distributors. It was developed in 2016. The ministry revised the domestic fuel pricing model in June, removing the five components out of 11 components.

In the new pricing module, MoEA removed five components, which include working capital, product loss, financial cost, operating cost, and transit insurance.

The committee has reinstated the product loss and operating cost components.

The official from the ministry said that the increase in fuel price is attributed to the reinstated components on the fuel dealer.

The fuel dealers will get 44 chhetrum for per litre of petrol and 26 chhetrum for per litre of diesel on the product loss component.

The official said that it is as per the International Organization of Legal Metrology and is standard and maximum permissible or tolerable limit.



Similarly, for the operating cost, the dealers will get Nu 1.068 for per litre of petrol and Nu 0.256 per litre for diesel.

The official also said that the department of trade has also recommended updating the shrinkage charges according to the temperature rise. The committee has considered the recommendations.

“Shrinkage charges are taken into account of updated temperature since over the years there is a change in temperature because the temperature in Phuntsholing is different from temperature in Gasa,” the ministry official said.

The official said that if the expenses are required to be provided to the dealers it should be provided but if it is unreasonable, the ministry ensures that there are no undue benefits for the dealers at the cost of consumers.

The official said that the department of trade is also considering the option of calibrating the transportation cost depending on the fuel price in future.



The committee has also reinstated the loading and unloading of LPG in which the average cost will increase by Nu 28 per cylinder and kerosene will increase by Nu 6.8 per litre.

Lyonpo Loknath Sharma said that revision of the domestic fuel price module is not to bring down the fuel price but to rationalise the mechanism.

Lyonpo said that there are no measures to reduce the fuel price since we are the price taker.

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