The government increased for the second time this year the prices of all fuel oils, including diesel, by Tk 5 per litre and that of furnace oil by Tk 8 a litre with effect from Sunday midnight under heavy pressure from the International Monetary Fund.
The price of diesel and kerosene has been raised from Tk 46 to Tk 51 a litre, furnace oil from Tk 42 to Tk 50, petrol from Tk 76 to Tk 81, and octane from Tk 79 to Tk 84.
The latest price adjustment comes four and a half months after the previous fuel price hike by Tk 2 per litre on May 6.
Although energy officials said that the government raised the fuel oil prices between 6.33 per cent and 19.05 per cent to offset its losses due to the global oil price rise, finance minister AMA Muhith had hinted at the price hike last week after a meeting with a visiting delegation of the IMF.
The government has been negotiating with the IMF for a $1 billion loan for budgetary support, to which the IMF has tagged a number of conditions, including price hike of energy and power.
The price hike of fuel oil came at a time when Muhith left Dhaka for Washington to negotiate with the IMF for the loan and with the World Bank for other budgetary support.
Economists expressed their concerns at the oil price hike, saying it would add fuel to the growing inflation which at the moment stood at 11.29 per cent, although the IMF and a few other lending agencies claimed the hike would not have any impact on inflation.
Bangladesh Institute of Development Studies research director Zaid Bakht told New Age that the oil price hike was not unexpected since the government was under a huge budgetary pressure to make payment for fuel-oil-based rental power plant projects, while lending agencies like the IMF were also tagging conditions of fuel price hike to the $1b loan.
He suggested that the government should achieve the capability to rein in food inflation, which had already crossed 10 per cent, by ensuring enough supply of essential commodities to the market.
With this, the government so far has increased the price of furnace oil by Tk 24 per litre this year – from Tk 26 to Tk 35 on January 24, then to Tk 40 on April 7 and now to Tk 50.
Similarly, the prices of diesel and kerosene were increased by Tk 7 per litre in two phases.
The government, earlier, decreased the diesel and kerosene price from Tk 46 to Tk 44 a litre on January 12, 2009 as the price of crude oil on the global market slumped to around $39 per barrel.
Bangladesh Petroleum Corporation chairman Muktadir Ali told New Age that the corporation would have to count losses by Tk 20 for a litre of diesel or kerosene and Tk 8 for a litre of furnace oil, if the oil prices remained stable at the stage even after the hike on the retail market.
-With New Age input
