The market for petroleum products is demonstrably one of the great selling points of the country. Nepal imports 100% of its petroleum product requirements via India. At present the country consumes approximately 83000 kilo litre /day of kerosene, diesel, gasoline and aviation fuels. This constitutes a growth of 40% over 1991 consumption patterns. Because petroleum imports are such a drain on the country's convertible currency reserve, the Government is actively trying to restrain any growth in this area.

The discovery of even a modest sized oil or gas field would dramatically improve the balance of payments and the pent up demand for petroleum related products would show an explosive growth. No only would the transportation sector benefit greatly from such a discover, the power generation and agricultural sectors would also benefit. Light industry could grow and the relatively cheap, highly under-utilized labour force could be put to productive use. Any excess petroleum would find a ready market in the Indian subcontinent to the south, as for the foreseeable future that country would continue to be a net importer of petroleum products.

While the infrastructure for transportation by road is in place and working quite efficiently, new infrastructure would be justified by any positive encouragement in the location and development of oil and gas pools. In particular, oil or gas fired turbine stations to produce electrical power could be built to serve regional demands with the cost of these stations being at least half the cost of comparable hydroelectric powered stations.

As agriculture is responsible for 50% of the GDP and for 90% of the working labour force, the ability to manufacture fertilizers and other agricultural chemicals in Nepal would be a tremendous boon for the country. One of the likely results would be greater efficiency in agricultural production resulting in greater independence from imported goods.

Although there are no refineries in Nepal, there are four refineries in Northern Indian within about 600 kilometers from Kathmandu. These are the Mathura refinery (120,000 bopd) some 300 kilometers from Nepal's Western border near New Delhi, the Barauni refinery (66,000 bopd) some 300 kilometers directly South of Kathmandu, the Haldia refinery (55,000 bopd) in Calcutta, some 600 kilometers South East of Kathmandu and the Bougaigon Refineries in Assam, some 400 kilometers from Nepal's Eastern border.