Govt mulls slashing fuel prices to adjust with global market

Amid the record price hike of commodities, the government is considering bringing a bit of relief to people as it has asked the Bangladesh Petroleum Corporation (BPC) to find out if the fuel oil prices can be cut in line with the downward trend in the global market.

The Ministry of Power, Energy and Mineral Resources also asked the BPC to let it know if the price could be adjusted every three months in line with the international market, said a source.

"We have already asked the BPC to assess the possibility of readjusting oil prices," State Minister for Power Energy and Mineral Resource Nasrul Hamid told the media yesterday.

"But we cannot take the decision in the current situation because if the price is low for two days then it is high again on the third day," he added.

After the third stakeholder meeting on "Integrated Energy and Power Master Plan", the minister said, "I think it would be a positive decision if we go to the open market to adjust the oil prices once every three months. Prices will go up once it is high in the global market and go down when it is down."

On 4 August this year, the Energy and Mineral Resource Division hiked the diesel, petrol, kerosene and petrol price by 42.5% to 51.6%, which was again revised down by Tk5 per litre later that month.

At that time, the price of per barrel West Texas Intermediate (WTI) crude oil was $90.66 which is now $75.18 per barrel.

But Bangladesh heavily imports refined oil which is around $25 dollar costlier than the crude oil.

Meanwhile, when asked, BPC Chairman ABM Azad told The Business Standard that oil price in the international market has started to fall down for the last couple of days which will not benefit us before one and half month passes.

"Right now, the fuel that we are supplying was imported one or two months back when the price was high. So, if we want to adjust it in the local market we need to observe for at least two months," he explained.

Meanwhile, talking about the retail electricity price hike, Nasrul Hamid said that it totally depends on the BERC. But we would try our best to keep the price within the people's affordability limit.

"Price adjustment depends on the global situation because we import a portion of energy from abroad," he added. 

Speaking as the chief guest at the event, prime minister's advisor on energy and mineral resources Dr Tawfiq-e-Elahi, said, "Carbon mitigation is not our responsibility, it is applicable for developed countries. We are not responsible for carbon emissions; we emit much less carbon than them."

Regarding the fuel mix, he said that the term energy transitional does not make sense for us, it also applies to developed countries. Moving away from coal is called transitional. We have taken up the project till 2030.

Japanese Ambassador to Bangladesh Ito Naoki said that the country believes in zero carbon principles.

"I hope Bangladesh will move forward in the same way. Japan is supporting the development of Bangladesh and will continue to do so in the future," he said.

The Integrated Energy and Power Master Plan is expected to be finalised in March 2023.