Govt raises fuel prices

Dhaka, Nov 10 — The government has raised the prices of octane, diesel, petrol, kerosene and furnace oil by Tk 5 per litre.

According to a government circular, the prices will become effective from Thursday midnight.

Following the raise, the price of diesel will be Tk 56, kerosene Tk 56, octane Tk 89, petrol Tk 86 and furnace oil Tk 55.

This is the third price hike of fuel prices in six months.

The last price hike of Sep 18 saw price of furnace oil go up by Tk 8 per litre. It was Tk 5 for other kinds of fuel — kerosene, diesel, petrol and octane. This time however, all kinds of fuel saw the same hike.

That round of price hike was preceded by another one on May 5.

One of the reasons for the price hike was to prevent losses of the Bangladesh Petroleum Corporation (BPC) due to hefty subsidies, said the circular.

Even so, the government would have to subsidise every litre of diesel, kerosene and furnace oil by Tk 16.39, Tk 16.31 and Tk 4.97 respectively.

Another reason that the circular cited was that in Kolkata, capital of the neighbouring Indian state of Paschimbanga, diesel sells for Tk 70 and petrol for Tk 117. "The price difference naturally leads to a risk of smuggling."

The circular said BPC had lost Tk 82 billion in the last fiscal due to the subsidies. The losses were further exacerbated by the fact that fuel demand had increased from 4.8 million tonnes to 6.8 million.

"It would impossible for the government to keep subsidising fuel at the prevailing prices."

Given the losses, the government would have to borrow more heavily on banks. "Besides, excessive government bank borrowing will hamper private sector investment," the circular noted.

bdnews24.com