The caretaker government increased prices of petroleum products for the second time during its tenure yesterday, 15 months into the last hike.
This time around the prices went up by 33 to 37 percent compared to the previous hike of 13 to 21 percent in April last year.
The new petroleum price regime went into effect immediately after the government announcement yesterday.
The new price of diesel and kerosene is Tk 55 a litre which is about 37.5 percent or Tk 15 more than their earlier price of Tk 40 a litre.
The new price of octane is Tk 90 a litre, which is 34 percent or Tk 23 more than its previous price of Tk 67 a litre.
Petrol is now Tk 87 a litre, up by 34 percent or Tk 22 from its previous price of Tk 65 a litre.
A cylinder of liquid petroleum gas (LPG) is now Tk 1,000, up from Tk 600, while a litre of furnace oil is now Tk 30, up from Tk 20.
Professor M Tamim, special assistant to the chief adviser on energy ministry affairs, told The Daily Star yesterday that the government had no alternative to increasing the prices of petroleum products. “We were helpless,” he said.
The price of a barrel of crude oil was $60 last year, which went up to $143 yesterday, he said adding, “We would have to spend Tk 17,000 crore in subsidies if we did not adjust the petroleum prices for the new fiscal.”
The government will still have to spend Tk 10,000 crore in oil subsidies despite the latest price hike in the prices of petroleum products, he said.
Asked how the price increase will affect the transport sector, M Tamim said, “There is no doubt that it will have an impact on the transport sector.”
“We calculated that the cost of fuel constitute only 32 to 40 percent of the entire cost in transport sector. So the cost in this sector should increase only by 12.5 to 13 percent,” he said.
The government expects that transport owners will not increase fares disproportionately. “We shall monitor it,” Tamim asserted.
He said to offset the impact of high petroleum prices in agriculture, the government in this year’s budget allocated Tk 540 crore for diesel subsidy to farmers, and if necessary, the amount will be increased.
The cost of transporting a kilogramme of rice from Dinajpur to Dhaka might rise to
Tk 1.493 from the previous cost of Tk 1.298, said a Press Information Department news release last night.
The price hike of diesel is also likely to raise bus fare to Tk 1.05 a kilometre, the release added.
Dr Uttam Deb, chief of research of The Centre for Policy Dialogue, said there was actually no alternative to hiking up petroleum prices, as the prices have been going up unabated on the international market.
“The government, however, has to be very careful, so the diesel subsidy for agriculture sector is duly implemented,” he added.
The government also has to monitor strictly the transport sector, so owners do not raise fares disproportionately, Dr Deb noted.
According to a government estimate, 35.7 lakh metric tons of petroleum products were used in Bangladesh in FY 2006-’07, 65 percent or 22 lakh metric tons of which was diesel.
Sixty percent of the diesel was used for transports, 32 percent for agriculture, and the rest was used for other purposes.
Categories: Bangla, Bangladesh, Bangladesh Economy, Bangladesh News, Daily Bangladesh News, Economy, News
