The Nepali Times, a local newspaper in Nepal, reported that the Aviation Turbine Fuel (ATF) has increased prices from $966 per kilolitre to $1785, with Kathmandu already having one of the highest ATF prices amongst airports in Asian airports. The increase in prices is most likely to affect any long-haul flights that need to refuel in Kathmandu.

Most flights arriving from nearby airports such as India, Gulf countries, and Southeast Asia are unlikely to be heavily impacted, as they can fly in on full tanks and require minimal refuelling in Kathmandu. However, airlines such as Turkish Airlines, Cathay Pacific, Korean Air and Nepal Airlines, which fly long-distance routes, could struggle with the price hike.

According to the NOC, prices for domestic flights have increased by 97.6%. The price hike has increased fuel costs for domestic airlines from Rs 127 per litre to Rs 251, according to the Nepali Times.

For airlines, fuel costs account for over a third of operating expenses, making even small increases in ATF prices have a significant impact. Since crude oil prices have been up 50% due to the war in West Asia, ATF prices globally have also doubled.

This has dealt a heavy blow to the tourism industry in Asia, including in Kathmandu. Airlines now not only face the struggle of higher fuel prices but also fewer people travelling. According to the Nepali Times, in March, Nepal's tourism arrivals dropped by half compared to February.

Nepal increased petrol and diesel prices by 9.55% and 7.0%, and started rationing cooking gas earlier this month.

Wedged between India and China, Nepal is fully independent of imports for fuel supplies, including cooking gas.

(With inputs from Reuters)