Faced with a severe fuel crisis in Nepal, Prime Minister Girija Prasad Koirala has appealed to India not to cut petroleum supplies which has failed to pay its bills to the Indian Oil Corporation (IOC).

During a meeting with Indian ambassador to Nepal Rakesh Sood today, the Prime Minister urged New Delhi to ensure normal supplies of petroleum products. He also thanked India for lifting the ban on export of cement and clinkers to Nepal in response to the interim government's request.

Landlocked Nepal has no oil reserves and relies on its giant southern neighbour India to truck in petrol, gas and other fuel. The failure of the state-run Nepal Oil Corporation (NOC) to pay off its past dues and monthly losses standing at NRs 150 crore, NOC has been unable to secure enough imports from its Indian supplier, deepening the fuel crisis in the country.

The flow of oil had considerably improved in the run-up to the April election, as the IOC had agreed to maintain a steady supply for the crucial vote as requested by Nepal government. Soon after the polls, the state-run oil monopoly in Nepal slashed the supply of diesel and kerosene.

The fuel shortage in the country has returned with a vengeance after the Constituent Assembly election last month, with long queues seen at petrol stations in Kathmandu valley.

Petroleum dealers have threatened to stage an indefinite strike from May 28 if the government fails to ensure smooth supply of petroleum products, nepalnews online said today.

The NOC said the distribution of petroleum products will grind to a halt if the government failed to take immediate measures to import more fuel from across the border as it will run out of the supplies within a week.