Diesel, kerosene prices slashed by Tk2.25 per litre for April

The government has reduced fuel oil prices for April 2024 under the automatic fuel oil pricing system aligned with the international market that came into effect this month.

According to the new rates, per litre diesel and kerosene will be sold at Tk106 in April, a Tk2.25 drop from March prices, reads a gazette notification of the Ministry of Power, Energy and Mineral Resources. issued today (31 March).

The prices of octane and petrol have been kept unchanged to Tk126 and Tk122, respectively, states the notification.

The new rates will come into effect on 1 April 2024.

The government launched the new formula to fix fuel oil rates on 7 March according to the terms of the International Monetary Fund (IMF) for a $4.7 billion loan. Prices will be fixed every month with the new automatic system. Two instalments of the loan have already been released. 

On 29 February, the Bangladesh Petroleum Corporation (BPC) issued a notification on Automatic Fuel Oil Pricing Guidelines.

According to the notification, the prices of all petroleum fuels – petrol, diesel, octane, kerosene, furnace oil, jet fuel, and marine fuels – will be set automatically based on the international market price.

It said octane and petrol are used in the country in large quantities in vehicles, hence their price is always kept higher than diesel as a luxury item.

The guidelines include details of automatic pricing structure, international price, moving average price, premium, operational expenses, financing, administrative and maintenance expenses, trade VAT, freight pool, dealers commission and transportation, and development fund and company margin.

In case of setting a price for any of the petroleum fuels, all the expenses, including the international market price, import tax, advance income tax and VAT, operational expense, finance, administrative and maintenance cost, the BPC's margins, VAT, and sale and distribution costs will be taken into account and then set a price.

According to sources at the Energy and Mineral Resources Division, fuel prices will be determined based on the average import price of refined fuel oil per barrel, which currently stands at $100.

Bangladesh has an annual demand of 65-70 lakh tonnes of fuel oil – more than 70% of which is diesel. The rest is petrol, octane, kerosene. Till now, the BPC is the only company to import and supply fuel. About 60% of the fuel oil consumed in the country is used in transportation and 15.50% in the agriculture sector