Adjust the fuel prices with international market

Fuel prices have been falling on the worldwide market since mid-November. Experts believe that an increase in fuel prices in the international market is unlikely. In that circumstance, the government should make a quick adjustment to the fuel price. At the very least, the price should be restored to what it was before November 3rd.

Last week, the Bangladesh Energy Regulatory Commission (BERC) reduced the consumer price of liquefied petroleum gas (LPG). It has reduced the price of a 12 kg LPG cylinder from Tk 1313 to Tk 1228 including VAT. Despite the fact that the lower price was meant to take effect on December 3rd, consumers claim that many merchants are still selling the cylinder for a higher price. In the private sector, a kilogram of LPG costs Tk 102.32. That equation is designed to be used to determine the price of an LPG cylinder. Aside from that, the price of LPG for motor vehicles has been set at Tk 57.24 per litre, down from Tk 61.18 previously. If this new price is enforced, consumers will feel slightly relieved.

Claiming that the reduction of LPG price will decrease people’s suffering, the BERC chairman said a family could buy at least 2 kg of rice with the amount of money saved. But he did not say how much the expense of people, especially of a farmer who uses machines for irrigation, will increase because of this hike in the price of diesel and kerosene. Increased expense in irrigation will increase the expense in agricultural production. Though BERC fixed LPG price through a mass hearing, BPC did not feel any necessity to take people’s opinion into cognizance before hiking the price of diesel and kerosene. Instead, they hiked the price unilaterally. Because of this fuel price, public transport fare has also shot up by 28 percent.

For the last six years, the government bought fuel at a low cost from the international market and sold it to the people at a high price. In the process, it has earned a huge profit. But, the government increased the price of fuel by Tk 15 per liter when the price increased a little in the international market. At the time, the state minister for power, energy, and mineral resources Nasrul Hamid said they would reconsider the price if the fuel price comes down in the international market. Several MPs from the treasury and the opposition bench slammed the decision to increase fuel price in the last Jatiya Sangsad session and demanded the withdrawal of the decision. In the context of the demand, finance minister AHM Mustafa Kamal said the price will be decreased in Bangladesh if the price comes down in the international market.

The price of fuel is downward in the international market since mid-November. Experts think the probability of a fuel price hike in the international market is less likely. In that case the government should adjust the fuel price soon. At least the price should be brought back to what was before 3 November.