Govt mulling fresh fuel price hike

The government is considering raising the fuel prices to cut losses of Bangladesh Petroleum Corporation (BPC) amid a price hike of crude oil and diesel in the global market which crossed $170 per barrel on Thursday.  
"We are not thinking to increase the price, we are just planning to adjust it as the BPC is giving a loss of more than Tk 100 crore every day in sailing petroleum products in local market at low price," State Minister for Power, Energy and Mineral Resources Nasrul Hamid said.
"We are examining the impact of price hike following discussions with all stakeholders including transport business operators last week", he said adding that the adjustment may come in the price of diesel and octane.
The government had last raised the prices of diesel and kerosene to Tk 80 per litre from Tk 65 with effect from 4 November, 2021.
"The government always tries to bear the burden when the price of any essential item goes up in the international market. But when the cost goes up excessively, the government bears part of the load and consumers bear the rest�.neighboring India has already adjusted the price by raising Rs 50 per litre", the State Minister further said.
When the government raised the diesel price in November last year, transport owners observed nationwide strike for three days. The government gave in to their demand for raising transport fares, putting an extra burden on people.
Energy imports had already been hit by a supply crunch and price hike on the international market which pushes the BPC to count a daily loss of
Tk 100 crore to keep diesel prices down.
CAB energy adviser Prof Dr Shamsul Alam claimed that the government needs to increase energy tariffs due to "illogical" costs of more than Tk 50,000 crore in the sector.
"Irrational cost of Tk 12, 000 crore in energy sector and Tk 42, 000 crore in power sector are responsible for tariff hikes," he said.
A reporter said BPC paid the government Tk 20, 000 crore in taxes from 30 to 35 per cent duty in the past two years. Fuel can be provided at lower prices if the duty is waived, the reporter said and asked if the government has any plan to do so.
He said the government can reduce the power production cost by withdrawing the hiked price of furnace oil and thus save Tk 8,102 crore.
In March this year, the government hiked the price of furnace oil to Tk 74 a litre, up from Tk 60 in December last year.
Shamsul said the government can save another Tk 10,321 crore by reducing dependency on the privately-owned quick rental plants and single-cycle power plants.
He said the government can save at least Tk 16,279 crore by withdrawing the recently imposed taxes on the import of petroleum, reinstating the tax break on the import of petroleum, and by importing furnace oil through the state-run BPC instead of private importers.
State Minister for Power, Energy and Mineral Resource said the government will adjust the prices in such a way that those remain "affordable" for consumers. He said Prime Minister Sheikh Hasina will make the final decision in this regard by this month.