The country imported 216 vehicles, worth Nu 216.88 million, in September alone while fuel import bill reached Nu 10.79 billion as of September

Thukten Zangpo

Since the lifting of the vehicle import moratorium on August 18, Bhutan has witnessed a spike in vehicle imports, with seven new vehicles hitting the road daily—a 135 percent month-on-month increase.

According to figures from the finance ministry, the country imported 216 vehicles, worth Nu 216.88 million in September alone. Of these, 130 were passenger cars, including electric vehicles, worth Nu 118.46 million, while 86 were vehicles exempted from the moratorium, worth Nu 98.42 million.

Before the import moratorium was lifted, 737 vehicles were imported between January and August, averaging 92 vehicles per month. Of these, 509 units—valued at Nu 627.82 million—were exempt from the moratorium, including buses, utility vehicles, special-purpose vehicles, and trucks. The remaining 228 vehicles, worth Nu 169.67 million, consisted of passenger and electric vehicles.

A finance ministry official said that the increase in passenger vehicle import suggests a rising consumer confidence and renewed enthusiasm in the market, signaling a promising recovery and growth potential moving forward.

However, monitoring trends in the subsequent months will be crucial to gauge whether this upward trajectory continues, he added.

Bhutan imported Nu 4.72 billion worth of vehicles in 2021, Nu 3.2 billion in 2022 and Nu 926.09 million last year. The decreasing trend was because of the government’s initiative to impose a vehicle moratorium to safeguard the country’s foreign currency reserves and ensure macroeconomic stability.

With the recent lifting of the moratorium, the government also plans to introduce higher vehicle registration fees and toll charges for vehicles entering the capital to control vehicle numbers and traffic congestion.

The new structure will impact vehicles registered in Thimphu, with incremental increases proposed for existing vehicles over the coming years with a differentiated registration system. The government is also exploring toll fees as a road pricing strategy to further manage congestion.

On the contrary, the ongoing Parliament saw a discussion on reinstituting Prado quota for the Members of Parliament MPs) and vehicle quota for civil servants while amending the Parliamentary Entitlement Amendment Bill 2024 and Pay Structure Reform Act  2022. This has been deferred to the summer session of the Parliament next year.

The Pay Structure Reform Act 2022 had removed vehicle quotas for all.

Suppose the vehicle quotas are reinstituted, MP’s Prado quota would get a tax exemption of Nu 4.5 million. It equals to 321.58 million tax revenue for 72 MPs.

The Royal Audit Authority’s review report on government vehicles and foreign vehicle quota system in 2019 found that the government lost more than Nu 3 billion in tax revenue in the last five years between 2014 and 2018 through foreign vehicle quota, which were extensively misused.

More than 9,000 vehicles were imported through government-issued vehicle quota between 2014 and 2018.

The growing number of vehicles also means depletion of foreign currency reserves with import of vehicles, spare parts, and fuel.

Bhutan’s top import item, fuel, was reported at Nu 10.79 billion as of September this year, comprising Nu 7.96 billion in diesel and Nu 2.83 billion in petrol. For the same period last year, fuel imports stood at Nu 10.67 billion.

Comparing figures in 2023 to the previous year, the petrol imports rose by 52.08 percent to Nu 3.39 billion while diesel imports grew by 43.38 percent to Nu 10 billion.

The country saw its export bills grow by Nu 5.32 billion to Nu 46.8 billion as of September this year from Nu 41.48 billion last year. Conversely, the country’s import bill saw a drop from Nu 86.7 billion last year to Nu 83.15 billion.

The country’s foreign exchange reserves stood at USD 629.15 billion, comprising USD 409.4 convertible currency and INR 18.4 billion as of September this year. This is a decline of 10 percent in foreign exchange reserves at USD 699.6 million—USD 475.75 in convertible currency and 18.66 billion in INR— in March.

As of October this year, there are 128, 087 vehicles in the country.  The highest number of vehicles is registered in Thimphu region at 70,457, followed by 39,702 in Phuentsholing region, 8,994 in Gelephu region, 5,802 in Samdrupjongkhar region, and 3,132 in Mongar region.

This means, there is one car for every six Bhutanese, taking into the estimated population of 777, 224 this year, excluding those abroad.