Fuel prices hiked in market

Government has raised the prices of diesel, kerosene, octane and petrol by Tk20 a litre, citing a sharp rise in international fuel prices and freight costs caused by the ongoing war in the Middle East.

Under the new pricing structure, diesel will rise from Tk115 to Tk135 a litre, octane from Tk145 to Tk165, petrol from Tk140 to Tk160, and kerosene from Tk135 to Tk155.

The government said international fuel prices had more than doubled since March, but domestic prices had been kept largely unchanged in the public interest. As a result, the Bangladesh Petroleum Corporation (BPC) incurred losses of about Tk228.76 billion between March and August, according to a government statement.

The government last raised the diesel price by Tk15 a litre on 18 April, taking it to Tk115. Prices have remained unchanged for the past five months despite the sharp increase in international markets.

The government said diesel prices in neighbouring and regional countries were substantially higher than in Bangladesh. Current prices are Tk134.76 a litre in Kolkata, Tk164.83 in Myanmar, Tk161.24 in Nepal, Tk179.42 in Sri Lanka, Tk151.22 in Thailand, Tk137 in Vietnam and Tk185.48 in Pakistan.

The relatively low domestic price, it said, had increased the risk of fuel being smuggled across the country’s borders.

The government also said it was providing substantial subsidies to keep electricity and gas supplies running amid higher liquefied natural gas (LNG) costs caused by the conflict.

At current international prices, BPC is losing about Tk89 on every litre of diesel, resulting in daily losses of roughly Tk1.09 billion, according to the statement.

Without an adjustment, losses on diesel alone could reach about Tk400 billion a year, it said.

The government estimates that increasing fuel prices by Tk20 a litre, bringing them closer to prices in neighbouring countries, could reduce BPC’s annual losses by about Tk100 billion.

It said the adjustment was necessary to reduce BPC’s losses, conserve foreign currency and curb the risk of fuel smuggling to neighbouring countries.

The new prices will apply to diesel, kerosene, octane and petrol following the government’s latest monthly price adjustment. 

-S/AAH