Kathmandu, Dec  29 (IANS): The Chinese government has agreed to provide 1.4 million litres of fuel worth 10 million yuan to Nepal as a grant, Deputy Prime Minister and Foreign Minister Kamal Thapa said here on Tuesday.

Earlier in October, China had provided 1.3 million litres of petrol to Nepal to cope with the severe fuel crisis that followed the blockading of the Nepal-India border in the wake of the Madhesi agitation against the new Constitution. 

Nepal Oil Corporation transported the fuel provided by China from Kerung in Tibet to Kathmandu.

A commercial deal in the pipeline to import fuel from China will end the more than five-decade-old Indian monopoly in supplying petroleum products to landlocked Nepal. 

Nepal has started cosying up to China for importing fuel, trade diversification and transit facilities after supplies from India were reduced to a trickle following the blockade along key Nepal-India entry points resulting in crippling shortage of essentials. 

Kathmandu signed its first ever fuel agreement with Beijing on October 28 to import petroleum products to ease the shortages. 

Thapa informed the media about the agreement to import fuel from China upon his return from a weeklong visit to China on Tuesday.

He said the visit was successful in creating permanent economic framework with China, whose scope included trade, transit, connectivity and investment.

The permanent economic framework will be signed during the China visit of Prime Minister K.P. Oli which is likely to happen in the first half of the next year, he added. 

During the visit, Nepal and China are likely to sign a trade and transit treaty, a Bilateral Investment Protection and Promotion Agreement, and a free trade agreement. 

The formal agreement for the import of fuel from China would be signed during Prime Minister K.P. Oli's China visit, Thapa said.