Govt defends fuel price hike amid global crisis

Information and Broadcasting Minister Zahir Uddin Swapon on Monday defended the latest increase in fuel prices, saying the adjustment was necessary to align domestic rates with the international market amid Bangladesh's continued dependence on imported fuel.

"Populist decision-making is not the only job of the government. The government's responsibility is to ensure good governance in the long term," he told reporters at his Secretariat office.

Responding to questions on the fuel price hike, the minister said countries dependent on imported energy had been adjusting prices in line with global market conditions since the onset of the energy crisis.

"Although many countries increased fuel prices earlier, our government kept prices unchanged for a long time despite being an import-dependent country," he said.

Swapon said Bangladesh would have to continue relying on imports to meet its fuel demand and therefore could not remain detached from developments in the international energy market.

Bangladesh has so far spent nearly US$2 billion in subsidies to procure fuel from the international market since the war began, according to the Energy Division.

Oil prices rose by more than 2 per cent in early trading on Monday after Israel ordered troops to move further into Lebanon in its battle with the Iran-backed Hezbollah group, despite a ceasefire announced more than six weeks ago.

US crude futures rose $2.37, or 2.71 per cent, to $89.73 a barrel as of 0028 GMT, while Brent crude futures gained $2.16, or 2.37 per cent, to $93.28 a barrel.

Despite rising fuel prices in the international market amid the West Asia crisis, the government has kept diesel prices unchanged to ease pressure on consumers.

"The government has to provide the highest subsidy for this. But despite that, it remains unchanged so that people are not affected," Amit told reporters at the Secretariat.

He said diesel accounts for around 66 per cent of Bangladesh's total fuel oil consumption.

The government has increased the prices of octane, petrol and kerosene by Tk 5 per litre for June. Under the revised rates, kerosene will cost Tk 135 per litre, octane Tk 145 and petrol Tk 140. The price of diesel, however, remains unchanged at Tk 115 per litre.