The black market for fuel has been, more or less, meeting the demand for fuel in the country. However, it is one of the main reasons why the fuel crisis has so significantly affected the country’s economy and it has also grossly undermined the government’s credibility. There are four main reasons behind the black market negatively affecting Nepal’s already regressing economy. First, more transactions on the black market means less revenue to the Government. The black market transactions are off-the-record. Thus, it is very easy for these transactions to evade the taxes, which would otherwise be paid to the government. Second, bigger the black market, the fewer opportunities for legitimate industries to function and meet people’s demand for fuel. Third, the bigger the black market the more underestimated is the employment data of the country. It is true that black markets employ a great number of people, but they are not officially recorded in the government’s data. Thus, even those people who are employed in the black market will be considered unemployed. Fourth, it may have led to deliberate creation of shortages in the country. Black markets leads to great monetary gains for its stakeholders, and thus, deliberate shortages are created because the stakeholders are aware of the fact that even though prices are hiked by linking it to the shortage of goods, the demand for these goods is not diminished.