Fuel oil price cuts expected this week

The government is expected to announce cuts in the prices of fuel oils by 5 to 9 per cent anytime this week.
It has sent a proposal for fuel price reduction to the Bangladesh Energy Regulatory Commission for approval, sources in the energy division said.
The price of diesel and kerosene is likely to come down to around Tk 50 per litre from the current price of Tk 55 and the price of octane to Tk 82-84 from Tk 90 and that of petrol to around Tk 80 from Tk 87 per litre, they said.
When contacted, energy secretary Mohammad Mohsin, told New Age on Sunday that they had sent the proposal to the BERC to cut the prices of fuel oils.
The chairman of BERC, Ghulam Rahman, said that they had received the price reduction proposal on Thursday and would make a decision in a day or two after holding a meeting with all members of the commission.
M Tamim, special assistant to the chief adviser, also told New Age that the government might announce price cuts this week.
The officials would not, however, say what would be the exact prices as it had not yet been finalised.
‘The extent of price reduction will be roughly around 10 per cent for all fuel oils. In terms of percentage, the cut in octane and petrol prices will be less as these are used by the affluent sections of the society’, said Tamim.
‘We have given different scenarios of prices. A final decision will be made later’, said Mohsin.
‘The price of diesel and kerosene is most likely to be reduced by around 9-10 per cent to Tk 50 per litre and octane and petrol by around 8 per cent to Tk 80-84 per litre’, a highly placed source in the division told New Age.
Energy officials said that they had already held discussions with communication ministry officials on possible reduction in transport fares after the new oil prices come into effect.
‘We have already held a meeting with the communication ministry and discussed the issue of transport fare reduction. I think the ministry is taking preparations for transport fare cuts when the oil prices are reduced’, Mohsin said.
The government has taken the steps to reduce oil prices on the local market against the backdrop of plummeting prices of oil on the international market which saw prices drop sharply by around 50 per cent – from $141 to $70 – in recent times. The government raised fuel oil prices on the local market by 33-37 per cent when the prices hit record highs on the international market in July this year.
When Tamim was asked why they were going for just around 10 per cent cuts in oil prices after hiking the prices by 33-37 per cent last time, Tamim said, ‘Despite the fall [in oil prices] BPC is still giving some subsidies in diesel and kerosene. After we reduce the prices, we will continue to monitor fuel oil prices on international market. If the current trend continues, we will again review the prices for downward adjustments.’
Mohsin said that when the fuel prices were increased in July, they projected that the BPC’s losses would come down to Tk 10,000 crore from Tk 17,000 crore.
‘After fuel price is decreased on local market, the government will need to give BPC Tk 4,000 crore in subsidy for the current fiscal year. So, at present we cannot afford to reduce prices by more than 10 per cent as it will create budgetary pressure’, he said.