oil price hike - Dhaka Mirror

Fuel oil prices go up again

Admin — Fri, 30 Dec 2011 16:19:24 +0000

In an unprecedented move, the government on Thursday raised the prices of all kinds of fuel – twice in 49 days – by Taka 5 per litre apparently in a bid to ease the balance of payment pressure which has been threatening macro-economic stability.
Due to the decision made effective from Thursday midnight, the prices of petrol will be TK 91 from TK 86, price of octane will be TK 94 from TK 89, prices of diesel will be TK 61 from TK 56, prices of kerosene will be TK 61 from TK 56 and prices of furnace oil will be TK 60 from TK 55. “The decision was taken in view of substantial rise in the prices of fuel in the international market,” a government handout issued late Thursday night said announcing the sudden raises.
Economists believe that the rise of fuel prices will trim the country’s subsidy burden but put more pressure on persistently high inflation as fuel prices would definitely jack up the prices of essentials.
Country’s point-to-point inflation rate increased to 11.58 per cent in November, which is .16% higher than previous month (11.42%).
“The hike of fuel-oil prices would further fuel the on-going upward inflation in the country’s economy pushing the fixed and lower to middle income groups into misery,” Professor Abu Ahmed of Dhaka University told The Independent. He apprehended that the series of price hikes of fuel-oil would have a long-term adverse effect on industrial production, employment and living standard of a large section of people.
Economist Professor Anu Mohammad said that majority of the population would substantially lose their purchasing power due to the price hike of fuel and they would have to compromise their living standard. He assessed around 95 per cent people would be affected due to the series of fuel price hike by Tk 10 a litter in two slabs in less than two months.
A number of small and medium industries might be laid off as a result of having to lose their competitiveness due to abrupt increase in production cost for hike in fuel prices, he said. Zakir Hossain, executive director of the Development Synergy Institute said that the decision of raising fuel price was made at a time when there was a high inflation in the economy. People with fixed income will particularly bear the brunt of this move, he added. During the previous price hike of fuels in November 10 by TK 5 per litre, officials claimed that despite that rise, government would have to pay a subsidy amounting to TK 16.34, TK 14.84 and TK 4.95 against the sales of per litre of diesel, kerosene and furnace oil respectively. Earlier on September 18 and in May government raised the fuel prices. After the previous price hike in November, BPC officials said that after the price adjustment, BPC would face about Tk 100 million in operating loss.

-With The Independent input

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Fuel prices hiked

Admin — Mon, 19 Sep 2011 04:14:24 +0000

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

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Fuel oil price hike to add huge extra burden for people

Admin — Fri, 06 May 2011 19:57:29 +0000

The latest price hike of fuel oils will offer very little help to the government in reducing the subsidies on fuel oils but will put a huge additional burden on the people by raising the living cost.
Experts said the businessmen would use the price hike for profiteering, although the hike was only nominal.
Abu Taleb, a government official, expressed his fear that the fuel price hike would result in further price spike of essential commodities.
Quoting two vegetable sellers discussing at Shewrapara Bazar in the capital, he told New Age that the wholesalers would have to pay Tk 10 to Tk 20 more for transporting 40 kilograms of vegetable from the production ends to the capital and the retailers will increase the vegetable price by Tk 2 to Tk 3 per kg.
Centre for Policy Dialogue executive director Mustafizur Rahman told New Age that the government had increased the fuel oil prices by about 2.5 per cent. ‘It will increase the production cost or supply cost only by 0.25 per cent, if the fuel accounts for 10 per cent of the total cost,’ he said.
The people concerned, including experts, pointed at the transport sector as the key source of possible anomalies.
They said transport businessmen usually raised the fares by several times of the price spike but the government played almost no role in controlling the anomaly.
Bangladesh Petrol Pump Owners’ Association president Nazmul Huq accused the successive governments of not keeping the transport fares at reasonable levels. ‘Every government in the last 10 years had rather allowed transport businessmen to increase the fares without doing any basic calculations,’ he said.
Nazmul told New Age that the latest fuel oil price hike, particularly that of diesel, would increase the fuel cost of oil-driven vehicles by Tk 0.10 to Tk 0.20 per kilometer.
CPD executive director Mustafizur Rahman said the government should take effective measures to reduce the burden of its decision on people.
The government raised the prices of all fuel oils, including diesel, by Tk 2 per litre with effect from Thursday midnight.
According to a statistics of the Bangladesh Petroleum Corporation, the price hike would reduce budgetary deficit created by diesel and kerosene by six per cent and by octane by 25 per cent.
The BPC incurs a loss of Tk 33.44 per litre by selling diesel, Tk 32.49 by selling kerosene, Tk 8.02 by selling octane, and Tk 12.96 per litre by selling furnace oil.
The BPC imports around 3.80 million tonnes of fuel oils, including 1.8 million tonnes of diesel and 1.4 million tonnes of crude oil.
BPC chairman Muktadir Ali said the price hike was a minimum one, considering the amount of loss incurred by the state-run corporation.

Courtesy of New Age

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