His predecessor and former coalition government ally, Pushpa Kamal Dahal, lost a vote of confidence on Friday, barely 18 months after taking office.
Dahal, a former Maoist guerrilla commander better known by his nom de guerre Prachanda (“The Fierce One”), was forced to step down after Oli’s party withdrew its support.
Oli instead forged a deal with Sher Bahadur Deuba of the Nepali Congress.
He has promised to yield the post to the former five-time prime minister Deuba, 78, later in the parliamentary term.
Nepal’s next general elections are due in 2027.
“OLD LEADERS”
The country became a federal republic in 2008 after a decade-long civil war and a peace deal that saw the Maoists brought into government and the abolishment of the monarchy.
Since then, a revolving door of ageing prime ministers and a culture of horse-trading have fuelled public perceptions that the government is out of touch with Nepal’s pressing problems.
But political journalist Binu Subedi said that while Oli was an old face in parliament, he faces fresh challenges.
“As new parties challenge old leaders, we have to see how this coalition performs,” Subedi said.
“Will they be more democratic and work well for the people?” she added.
“Or think that they can do anything because they have the strength of numbers?”
