Wednesday, May 08, 2024
Several days after the automatic price adjustment method for petroleum fuels was introduced in line with the global market, the government has slightly reduced the retail prices of diesel, octane and petrol for March.
In a gazette notification on Thursday evening, the Energy and Mineral Resources Division (EMRD) announced that the new prices will be effective from Friday morning.
The government has reduced the petrol price by Tk 3 per litre to Tk 122; diesel and kerosene prices by Tk 0.75 per litre to Tk 108.25, and octane price by Tk 4 per litre to Tk 126.
If the price of fuel goes up in the global market, it will be increased in the country. And if it decreases, it will decrease here too, according to the notification.
Issuing the notification in this regard, the Ministry of Power, Energy and Mineral Resources in a clarification said that octane and petrol are mainly used by private car owners and deemed luxury items. So, the prices of octane and petrol always are higher than of diesel’s.
Earlier, the government on February 29 issued a “Fuel Pricing Guideline” through a gazette notification to set an automated price for petroleum fuels across the country for every month.
The guidelines, however, giving an example for its effectiveness said that if it is planned to be made effective from April 1, the prices of fuels for one month in the international market from February 21 to March 20 have to be taken into consideration to set an average price and then set the price for April.
But the prices of fuels were set from March 8.
State-owned Bangladesh Petroleum Corporation (BPC) always makes a profit by selling octane and petrol because 100 per cent of octane and 40 per cent of petrol used in the country are produced domestically.
However, BPC's profit and loss depend mainly on diesel as it is 75 per cent of the oil used in the country. BPC has been making a profit by selling diesel for a long time but at present, it’s not much.
Meanwhile, BPC regularly adjusts the prices of jet fuel, used in aircraft, and furnace oil, used in power plants. The prices of diesel, kerosene, petrol and octane are determined by EMRD.
To avoid the burden of subsidy, fuel prices were increased by an average of 42 per cent in August 2022. Later, in the face of widespread criticism, the price was reduced by Tk 5 per litre towards the end of that month.
The EMRD notification said that since the last fuel price adjustment, the premium of petroleum products, transportation costs, insurance and bank interest rates have also significantly increased in the context of the post-Covid supply crisis, Russia-Ukraine war, and ongoing tension in the Middle East.
It also mentioned that during the mentioned period, only the domestic currency was devalued against the US dollar and the fuel prices (mainly diesel) in the world market were volatile.
It said that from now on, the consumer price will be adjusted every month alongside the import price in line with the new formula.
Even though the fuel prices have been adjusted in the country, diesel is currently being sold in India’s Kolkata at 92.76 rupees per litre or Tk 133.57 and petrol at 106.03 rupees or Tk 152.68, which is about Tk 24.57 and Tk 27.68, respectively, higher than Bangladesh, said EMRD.
Regarding the latest move, energy expert and BUET Professor M Tamim said the crude oil price in the international market is now on the rise, so there is no chance to reduce the diesel price much. “However, there was a good chance to reduce the octane and petrol prices further.”
He said that since the fuel prices have been reduced, transportation and production costs should come down. But if those costs and prices of goods do not fall, people will not get the benefits.
EMRD said that the previous month’s average price in the international market will be considered for the price adjustment. In line with that, the average price of February has been taken into consideration for March.
