Rising Fuel and Material Costs Pressure Nepal’s Construction Sector

The ongoing geopolitical tensions in the Middle East have begun to impact Nepal’s construction sector. Rising petroleum prices combined with alleged cartel practices by a few importers in construction materials are putting businesses under severe pressure.The Nepal Oil Corporation adjusted fuel prices from Chaitra 1 midnight, raising petrol from NPR 169.50–172 per liter and diesel and kerosene from NPR 149.50–152 per liter. The tensions among the US, Israel, and Iran have shaken global oil markets, directly affecting countries like Nepal, which lack domestic energy sources.Construction entrepreneurs, however, are more concerned about artificial shortages and arbitrary price hikes in building materials. According to Ravi Singh, President of the Nepal Construction Entrepreneurs’ Federation, material prices have increased by up to NPR 40 compared to earlier bookings. Prices fluctuate throughout the day, with iron rods now reaching NPR 85–90 and similar trends observed in cement.To tackle the crisis, the Federation has urged the government to declare a ‘Construction Holiday’ until market prices stabilize. Singh stressed that current price hikes are not immediate effects of international markets but result from speculation and hoarding by some importers.Industry representatives, however, deny allegations of cartelization. Hari Nyaupane, Chairman of Ambe Group, explained that rising international fuel prices and increased transportation and production costs are behind the price increases. A 50-kg bag of cement has seen a rise of NPR 20–25, and empty bags from NPR 20 to NPR 35, reflecting genuine cost pressures rather than manipulation.