Diesel, kerosene prices hiked by Tk15 a litre

Bangladesh government has increased the prices of diesel and kerosene by Tk15 today due to continuing rally of fuel prices in the global market.

Customers will have to pay Tk80 for per litre of diesel or kerosene from Thursday, said a press release of Energy And Mineral Resources Division on Wednesday night.

In the wake of increasing fuel oil prices in the international market, many countries including neighbouring India are adjusting the prices on regular intervals, said the press release, adding that on 1 November, diesel price in India was Rs101.56, which is equivalent to Tk124.41, but in Bangladesh the price was Tk65.

Considering the current purchase price, the Bangladesh Petroleum Corporation said it is losing around Tk20 crore per day as it sells per litre of diesel at a price Tk13.01 less than the purchase price and furnace oil at Tk6.21 less per litre.

In October this year, the corporation lost some Tk726.71 crore as it supplied various grades of petroleum products at current prices.

The last time the price of petroleum products was reduced was through a gazette notification on 24 April 2018.

However, the increase in fuel oil prices is likely to push up the prices of daily essentials and cost of living significantly because the agriculture and transportation sectors are largely dependent on diesel, said Ghulam Rahman, chairmen of the Consumers Association of Bangladesh.

He said irrigation work in the forthcoming boro season may also face a hurdle due to the price hike.

Instead of a fuel price hike, he suggested, the authorities may keep the fuel market stable with the profit gained over the years when oil prices in the global market were lower. 

Earlier on 10 October, the Bangladesh Energy Regulatory Commission (BERC) increased the price of a 12kg LPG cylinder by Tk226 to Tk1,259.

The BERC increased the cooking gas price adjusting the LPG's raw materials price which has gone up massively in the international market.

On the other hand, the BPC increased the furnace oil price from Tk53 to Tk59 per litre on 8 October to adjust its losses.

The transportation sector including buses, tracks and waterways is the largest user of diesel.

In FY2020-21, the sector consumed around 40 lakh tonnes of fuel whereas the country's total consumption was 63 lakh tonnes.

Therefore, the price hike of diesel will lead to a rise in bus fares and goods transportation costs, stakeholders said.

Ramesh Chandra Ghosh, chairman of the Bangladesh Bus Truck Owners' Association, told The Business Standard that the diesel price hike will directly affect passengers and goods-carrying trucks.

Prices of commodities will also increase, raising the living cost, he added.

He further said the authorities should follow the Indian example before raising the prices of diesel.

The Indian government on Wednesday reduced taxes on petrol and diesel in a bid to improve consumer sentiment, as Asia's third-largest economy recovers from the shocks of severe lockdowns to control the spread of the coronavirus.

Earlier on Friday, trade sources said that top oil exporter Saudi Arabia may raise prices of light crude grades to Asia in December, supported by a rebound in distillate margins and spot premiums for Middle Eastern oil this month.