Bangladesh considers fuel price revision

State Minister for Power, Energy and Mineral Resources Nasrul Hamid has said the government will make a readjustment in the petroleum price in a day or two.

“The Bangladesh Petroleum Corporation (BPC) is analysing the impact of the duty cut on diesel import. Once it’s complete, the government will make the readjustment,” he told reporters on Monday.

The state minister, however, said it’s still unclear as to how much downward price adjustment would be possible at this stage as the price of fuel is again increasing in the international market.

Following a meeting with petrol pump owners on Monday, BPC Chairman ABM Azad also expressed hope that they would analyse the recent duty cut on diesel import and withdrawal of advance income tax within 2-3 days.

Then, he said, they will send findings to the ministry to take a final decision on any possible adjustment in diesel price.

The state minister and the BPC chairman made the comments a day after the government cut the duty on diesel import by half to five percent and abolished all advance taxes on its import.

The changes were notified through a gazette notification issued by the National Board of Revenue (NBR) on Sunday.

The order came into effect immediately and will remain effective until the end of (December 31) this year.

The NBR notification added that light and high-speed diesel oils will get the new facilities.

Experts in the industry and the transport sectors believe that the new order came against the backdrop of the consistent demand from politicians and business circles, as well as the common people, following the government’s hike in prices of all petroleum fuels.

The government on August 5 announced the largest ever hikes in the price of fuel oil - ranging from 42-52 percent – with effect from August 6.

At the consumer level, the retail prices of diesel and kerosene went up to Tk 114 per litre, up by a whopping 42.5 percent from Tk 80/litre.

Octane price was raised to Tk 135 per litre, up an eye-watering 51.7 percent from Tk 89/litre - again the largest hike on record.

Lastly, a litre of petrol was set at Tk 130 from at the pump, which used to be Tk 86/litre even just a few hours ago as of writing this report - another 51 percent hike in one go that has no precedent in independent Bangladesh.

Bangladesh annually imports about 6.5 million tonnes of petroleum, of which 5.0 million tonnes is refined. Of these, the major portion is diesel - mainly consumed by transport, industry and power sector.

However, the petroleum price started witnessing a decreasing trend from August 1 after the per barrel crude oil price was recorded to be $130. After that record high, it witnessed a per barrel price below $90.

During the hike of fuel prices, it was said by the Energy Division that the state-owned BPC has been running a loss of Tk 80.14 billion in petroleum fuel sales in the last six months, from February to July.

The BPC chairman said that despite price fall in international market, the organisation has to incur a loss of Tk 10-12 per litre in diesel.

Responding to another question, he said discussion on the import of Russian oil still remains at the primary level and the government is assessing pros and cons of such import.

Earlier, State Minister for Power, Energy and Mineral Resources Nasrul Hamid had said that the government would go for readjustment in fuel prices if price in the global market comes down.