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The government has kept unchanged the prices of diesel, kerosene, petrol and octane at Tk 102 per litre, Tk 114 per litre, Tk 118 per litre and Tk 122 per litre respectively for the month of August under the automatic fuel pricing formula.
Petroleum prices have been kept unchanged to those similar to July level to ensure the supply of such items at reasonable prices, an order of the Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMR) stated on Thursday.
The EMRD also published a gazette on the petroleum prices for August.
The automatic fuel pricing formula was first introduced by the government on March 07, 2024.
The government usually applies Platts's oil product assessments or benchmarks for fixing refined oil products and for crude oil, it looks at S&P Global Platts's Dated Brent benchmark while buying petroleum products from the international market.
Sources said the new oil pricing formula is aimed at ensuring no loss, no profit for state-run Bangladesh Petroleum Corporation (BPC).
The BPC in February last year prepared a guideline on automatic oil pricing under which the prices of all petroleum products will be fixed.
Under the guideline, all types of costs, including international market price, import tax, advance income tax and value added tax, or VAT, operational expense, administrative and maintenance costs, BPC's margin, and distributor's margins would be added before fixing the prices of petroleum products.
Prices of octane and petrol are considered as luxury fuel, under the guideline, and hence their prices should always be kept higher than diesel, it narrated.
The price difference between octane and diesel should be at least Tk 10 per litre in the domestic market, it spelled out.
Bangladesh usually imports around 300,000 tonne of octane annually to meet domestic demand, while the demand of petrol is made through production from the country's lone crude oil refinery - Eastern Refinery Ltd (ERL), and from condensate fractionation plants.
Since its independence in 1971, Bangladesh has been fixing domestic petroleum product prices through executive orders by the government.
The BPC would attain profit from petroleum product trading in most of the years and provide dividends to the government after clearing all debts and liabilities, including taxes and VATs.
The ministry of finance would provide a subsidy when the BPC incurred a loss in petroleum product trading or when oil prices in the international market were high and volatile.
Bangladesh introduced the automatic oil pricing formula for the first time in line with a recommendation from the global lender -- International Monetary Fund (IMF).
It was among several conditions for reduction of subsidies as set by the IMF for a US$4.7 billion loan.