Bangladesh Fuel Price Adjustment Had No Alternative Amid Middle East Crisis: State Minister
Bangladesh raises fuel prices as Middle East tensions drive up international oil and shipping costs, with the government citing mounting losses.
DHAKA, Sept 21 — Bangladesh had no alternative but to raise domestic fuel prices as the conflict in the Middle East pushed up international oil prices and shipping costs, State Minister for Power, Energy and Mineral Resources Anindya Islam Amit said on Monday.
“The crisis in the Middle East is taking on a new dimension every day. Oil prices are rising, and shipping costs are also increasing,” Amit told reporters at the Secretariat.
The government incurred losses of 22,875 crore taka ($1.87 billion) between March and August by keeping domestic fuel prices below levels reflecting international market prices, Amit said. The average monthly loss was about 3,813 crore taka, he added.
Bangladesh imports about 7 million tonnes of petroleum products a year, including roughly 4.5 million tonnes of diesel, according to Amit.
He said the average international price of diesel was about 205 taka per litre, while it had been sold domestically at 115 taka before the latest adjustment.
Even after the price increase, the government is losing about 70 taka per litre on diesel, down from about 90 taka previously, Amit said.
Without the adjustment, annual losses on diesel alone would have reached about 40,000 crore taka, while losses across all petroleum products could have approached 50,000 crore taka, he said.
Amit said the government also needed to consider the potential impact of fuel subsidies on social protection spending, as authorities plan to bring low-income families under a family-card programme.
He acknowledged that higher fuel prices would put pressure on consumers and expressed regret over the decision.
“People will face pressure because of the increase in fuel prices. I understand their suffering,” he said.
Amit also cited diesel prices in several regional markets, saying they were about 134 taka per litre in Kolkata, 164 taka in Myanmar, 161 taka in Nepal, 179 taka in Sri Lanka, 151 taka in Thailand and 137 taka in Vietnam.
He said Bangladesh’s relatively low domestic diesel prices had increased the risk of fuel smuggling across its borders, making a price adjustment necessary to address that risk.
The prime minister has instructed relevant ministries to take measures to keep the impact of the fuel price increase on consumers within a tolerable level, Amit said.
One crore is equal to 10 million. The dollar equivalent is approximate.
