The demand for oil continues to increase but the capacity to produce is limited. According to Energy Information Ad1ministration (EIA), the world demand for oil in 2004 averaged at 82.5 million barrels per day and this is forecasted to be 84.7and 86.7 million barrels per day in 2005 and 2006 respectively.

The worldwide oil reserves at the beginning of 2004 were estimated at 33 cubic miles and the demand for oil in the year 2003 was 1.14 cubic miles. This demand is expected to reach 1.21 cubic miles by the end of 2005. This shows a 6.14percent growth in the demand for oil from 2003 to 2005. If this growth rate is to persist, an effort to meet the increasing demand will apparently cause the worldwide oil reserves to get drained by 2024.

Also according to the EIA sources, the price of light sweet crude oil in the international market was $10.83 per barrel in 1998 and this has hiked to $65 per barrel this August. This is more than five times in seven years.

Nepal's transportation sector depends heavily on imported oil from India. The prices of imported petrol and diesel have gone up by Rs 33 during the last ten years. India, which hiked the oil prices in June, has put extra burden of Rs 4 on import of per liter of petrol and diesel to Nepal Oil Corporation.

Aggravated more by price subsidization and cross-border smuggling, oil imports drain the foreign reserves out of the country. If oil prices were to be raised to compensate for all oil inflicted losses to the country, the price would surge quite high.

Hydro-based electric vehicles

More than 90% of the total electricity consumed in the country comes from hydroelectricity. According to Nepal Electricity Authority (NEA), from a total available electricity of 2832 GWh in 2004, only 1807 GWh was sold while most of the remaining 1025 GWh was spilled. This spilled electricity occurring mostly during off peak hours can be used to charge batteries of electric vehicles (EVs). NEA has fixed lower electricity rates for the transportation sector. Thus the use of electricity as transport fuel is the best alternative for Nepal.

Our neighbors, China and India have achieved a lot of progress in the development of EVs. In 2008 Olympics, China plans to operate a large number of EVs in Beijing. A wide variety of EVs ranging from electric scooters, cars, vans to high capacity electric buses, hybrid buses, fuel cell buses are being manufactured in China for the purpose.

In India, a Bangalore-based company REVA has developed mini electric car that is operating commercially in India, Japan and Europe. Scooters India Ltd. has developed several models of electric three wheelers. Bajaj Auto Limited is manufacturing EcoRick - an electric version of its popular three wheelers. TATA and Ashok Leyland are manufacturing electric trolley buses. BHEL, a public sector company, has manufactured electric buses.

In Nepal, use of EVs in public transportation started from 1970s with the Chinese government supported trolley buses. Safa Tempos, the battery operated three wheelers, introduced in 1996, have already crossed 600 in number. 35 battery-charging stations are catering the battery charging needs of these EVs. Organizations like KEVA, KU, ESPS, HLF, etc have come together to develop EVs fit for tourism and garbage collection, upgraded Safa Tempos and electro-buses. Hulas Motors is working to manufacture battery-operated van called Electric Mini-V in the near future.

Ironically, EV Industry has not been receiving adequate attention from the government and the involvement of private sector has been limited. The government should prioritize operation of EVs and eliminate the bottlenecks restraining private investors into investing in this sector. The government should wake up to the frightening reality that if dependence on fossil fuels is not reduced, the country may have to discontinue bulk of its economic activities in future simply because of unaffordable imported oil. The fact that, even "mild" shortages of oil like the ones in the past, can cause such a panic should help us foresee the extent of upheaval and economic recession a major oil crisis can instigate. It is high time that we seriously start thinking about switching into a transportation system that is based on extensive use of indigenous hydroelectricity.