Fuel prices raised in Bangladesh

Dhaka, Apr 2 (UNI) The Bangladesh government raised the prices of fuel from today to make an adjustment with the international market rates.

The prices of diesel and kerosene have been increased by Tk 7 (local currency) to Tk 40 per litre from the existing Tk 33 while that of octane and petrol by Tk 9 to Tk 67 and Tk 65 per litre respectively.

''The government expects the people to positively accept the decision it has taken, considering the increased prices of fuel oil in the international market, smuggling of fuel oil and the country's economic situation,'' said a circular issued by the Energy and Mineral Resources Division.

A committee, headed by the Chairman of Bangladesh Petroleum Corporation (BPC), will later adjust the prices at specific intervals in line with the fluctuation of international prices of the petroleum products, the announcement said.

It said the government was fully aware about the possible increase in agriculture and transport expenses, and committed to making allocations in the next budget to provide the farmers with financial support to reduce the impact of the increased prices of fuel oil on the agriculture sector.

The government considered that the increased transport fare would be affordable to the people if the transport owners adjusted it rationally with their existing fares.

The announcement referred to a calculation of transport fares that a bus passenger will have to pay additional seven paisa per kilometer due to the raise in diesel price while a truck will cost additional 23 paisa per kilometer for carrying one ton of goods.

''The government expects that the transport owners will show sincerity in this regard,'' said the circular.

The government also explained that the price of petrol in the country was Tk 56 per litre early this year while it was equivalent to Tk 73.75 in India, Tk 61.43 in Pakistan, Tk 64.92 in Sri Lanka and Tk 66.16 in Nepal.

Diesel was selling at Tk 33 per litre while it was equivalent to Tk 52.66 in India, Tk 43.16 in Pakistan, Tk 43.07 in Sri Lanka and Tk 45.42 in Nepal.

''BPC is incurring a huge loss per year -- Tk 10 per litre in diesel and Tk 9 per litre in kerosene,'' said the circular.

Sources said the BPC's huge outstanding loans of Tk 14,000 crore with different national and international banks and institutions and also a cumulative loss of Tk 11,700 crore in its business had prompted the government to go for such major hike in petroleum pries.

Unrealised petroleum bills of over Tk 1,500 crore lying with different public bodies is another concern for the BPC, which is about to cripple the financial backbone of the state-owned organisation, Energy Ministry sources said.

The fuel prices were last raised on June 8, 2006 during the BNP-led alliance government.

At that time, per litre price of both diesel and kerosene was fixed at Tk 33 from earlier Tk 30. Similarly, the price of petrol was set at Tk 56 per litre from earlier Tk 42 and the price of octane set at Tk 58 from its previous rate of Tk 45 during the previous government.

UNI