Conflict in the Middle East Raises Concerns for Nepal’s Bottled Water Industry
Image source, Getty Images
Bottled water industry leaders are calling for price hikes to reflect increases in plastic raw material costs, but officials emphasize that no decision can be made without public hearings involving stakeholders.
The Chairman of the Nepal Bottled Water Industry Federation told the BBC that if maximum pricing guidelines set by the water pricing commission remain unchanged, many water industries across the country may be forced to close.
Business owners expressed particular concern over the steep increase in petroleum product prices and raw materials for the production of bottles and jars, attributing this rise to the ongoing conflict in the Middle East.
Currently, businesses argue that the price of bottled water should increase by 5 Nepalese rupees per liter, and jarred water should see a rise of 10 to 12 rupees.
The commission responsible for wholesale and bottled water pricing has stated that any decision will be made only after public hearings and consultations with concerned parties.
What Does the Water Industry Say?
According to the Nepal Bottled Water Industry Federation, there are approximately 620 water industries throughout the country, of which 190 are currently closed for various reasons.
The federation’s chairman, Bikram Limbu Chemjong, explained that industries still operating face difficulties due to rising costs of packaging materials and transportation fuel.
“The cost of packaging materials has increased by 40 to 50 percent. Diesel prices have skyrocketed, leading to higher transportation expenses. It’s impossible to continue selling at old prices,” he said.
Chemjong stated that the federation has highlighted this issue to the water pricing commission and warned that many industries might be forced to shut down.
“We are already purchasing raw materials and fuel at increased prices. Everyone should understand the need to raise water prices. If we have to sell at old prices, the industries will have to close,” he added.
The federation reported that billions of rupees have been invested in the water industry, which supplies around 424,000 jars and 156,000 bottles daily to the market.
Water industries reuse jars for 20-liter water containers; however, bottles are not reused as frequently.
How Much Have Plastic Prices Increased?
Image source, Bikram Limbu Chemjong
Business operators report shortages and price increases in plastic and related raw materials due to the Middle East conflict.
Prabodh Ghimire, chairman of the Nepal Plastic Manufacturers Association, explained that after the US and Israel attacked Iran, prices for plastic raw materials increased by as much as 60 percent internationally, affecting Nepal as well.
He noted that plastic materials are imported from countries such as India, Saudi Arabia, and Qatar, and stated, “All plastic products have seen price increases of up to 60 percent. From chairs and stools to polythene pipes, bags, and bottles, the increase has been uniform.”
The association counts more than 200 plastic industries nationwide. The chairman added that some industries have faced challenges obtaining raw materials due to the Middle East conflict.
Following Iran’s involvement in the conflict and the blockade of the Hormuz Strait, supply chains were disrupted, causing plastic bottle prices to rise significantly, even in India.
Currently, businessmen state the price of bottled drinking water is 20 Nepalese rupees per bottle, and jars cost 50 rupees.
According to Chemjong, the price of an empty bottle has increased from 3 to 5 rupees, and without price increases or subsidies, industries will face severe challenges.
What Do Officials Say?
Nepalese officials stated that although businesses have requested price increases, the government has yet to make any decision.
Rudra Prasad Gautam, chairman of the Drinking Water and Sanitation Revenue Commission, explained that previous bottled and jarred water prices were set in cooperation with the parliamentary Consumer Rights Committee, and that a 2024 regulation grants the commission pricing authority.
He said, “We cannot simply set prices arbitrarily. We can only provide recommendations if we receive detailed proposals and cost breakdowns. Then consultations with the commerce department and other stakeholders follow. There might even be questions from parliamentary committees. No formal proposal, no decision by the commission.”
He emphasized that decisions must be made only after consultations with the government and stakeholders, including public hearings.
However, Chemjong highlighted that the water industry employs over 15,000 individuals nationwide and that the commission’s process could not afford extended delays.
He added, “If we follow the commission’s timeline, we may have to close industries for six months before reopening. We will submit proposals, await public hearings and approvals. Meanwhile, we might need to sell our homes and property just to keep operations going.”
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