Fuel prices fall under automated pricing

Prices of fuel oils fall somewhat, for cuts by Tk 0.75-Tk 4.0 per litre, as Bangladesh goes for automated petroleum pricing under a reform programme.

The government lowered oil prices under the newly introduced Automatic Fuel Oil Pricing Guidelines, apparently in conformity with an IMF lending package that proposes comprehensive economic reforms.

"The reduced rates of fuel oils come into force from 12:01am today (Friday)," says a circular issued by the Ministry of Power, Energy and Mineral Resources on Thursday.

With the downward adjustments, the prices of diesel and kerosene have been lowered nominally to Tk 108.25 per litre at the consumer end from their previous rates of Tk 109.

Also reduced is the price of petrol by Tk 3.0 to Tk 122 per litre from the earlier rate of Tk 125.

Octane price has been re-fixed at Tk 126 per litre, down by Tk 4.0 from its previous price of Tk 130, according to the circular.

The downward adjustments of fuel-oil prices commenced for the first time under the automated pricing formula.

The rates of fuel oils have come down under the new price-adjustment mechanism as the prices petroleum remain comparatively lower on the global market, informed circles said.

Earlier, the government issued the "Automatic Fuel Oil Pricing Guidelines" on February 29, in which it was stated that prices of fuel oils would be fixed automatically in line with the international market rates.

Following the issuance of the guidelines, State Minister for Power, Energy and Mineral Resources Nasrul Hamid told newsmen that the fuel-oil prices would, from now on, be adjusted on a monthly basis.

In August 2022, the government raised diesel, kerosene, petrol and octane prices by an average 42.5 per cent, taking higher the cost of imported fuels following the impact of COVID-19 pandemic, the Russia-Ukraine war, and tensions in the Middle East.

Following strong criticism from various quarters, the government reduced the oil prices by Tk 5.0 per litre in the same month.

Bangladesh Petroleum Corporation (BPC) and companies under it are engaged in importing and marketing of fuel oils.

Usually, diesel accounts for 75 per cent of the country's total consumed fuel oils, ministry sources said, adding that the profit or loss of the government largely depends on the marketing of such gasoline.

Taking the advantage of lower global prices, the BPC has been making profit from the marketing of fuels on the domestic market.

However, economists and analysts say though the price adjustments are a positive initiative, the rates of reduction are not sufficient enough in the current context of people's woes.

When asked, eminent economist and founder-chairman of Policy Exchange Bangladesh (PEB) Dr M Masrur Reaz said the adjustments of fuel-oil prices under the newly introduced pricing formula is a welcome move.

"We have been hearing from the government that the prices of petroleum fuels would be adjusted time to time in line with global-market prices. Finally, it has come true," says Dr Masrur.

The downward adjustments of fuel oil prices have certainly come as 'some sort of relief' as petroleum fuels largely influence people's cost of living and other economic activities.

The economist, however, feels that the Tk 0.75 (per litre) cut in the diesel price is not sufficient in the context of its global price.

"There is further scope for downward adjustment of the fuel-oil prices at the domestic level, particularly for diesel," he says.

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