Huge fuel subsidy cuts other sectors’ spending: Zahed 

  
Prime Minister’s Information and Broadcasting Adviser Zahed Ur Rahman acknowledged on Tuesday that the move for fuel price hike would increase pressure on ordinary people but rising energy subsidies are forcing the government to balance fuel-sector losses with the spending on education, health and social safety programmes. 

The government raised the prices of diesel, octane, petrol and kerosene by Tk 20 per litre on Sunday night. The new prices came into effect on Monday.

Zahed said crude oil prices had fallen by 2 to 3 percent in the global market over the past few days, but remained above $100 a barrel.

He said the current high prices may not last indefinitely, but warned that the global energy situation could worsen further.

He cited volatility in the international market and the government's growing subsidy burden as key reasons behind the price adjustment.

The adviser said BPC was losing around Tk 89 per litre on diesel. This amounted to about Tk 109 crore a day and more than Tk 40,000 crore a year from diesel alone.

Even after the Tk 20-per-litre increase, the government still has to provide substantial subsidies, he said. The price adjustment, however, is expected to reduce annual losses by around Tk 10,000 crore.