Oil price cut soon, says Muhith
Finance minister AMA Muhith on Thursday said that the government would cut the prices of fuel oils in the local market soon for higher economic ‘momentum.’
‘We would submit a proposal to the energy division for the oil price cut,’ he told reporters after a meeting with visiting International Monetary Fund officials at the ministry.
He, however, gave neither the rate of the oil price cut nor any specific date for the price cut.
Muhith said that he was expected to discuss the issue with the prime minister before the next session of parliament scheduled for December 4 to begin.
The government cut oil prices in the domestic market six months ago after severe criticisms.
On April 25, the government cut the prices of octane and petrol by Tk 10 a litre and diesel and kerosene by Tk 3 per litre.
The price of diesel and kerosene was reduced to Tk 65 from Tk 68 a litre, octane to Tk 89 from Tk 99 and petrol to Tk 86 from Tk 96 a litre.
Muhith said that the price cut was nominal for petrol and octane.
He said that economists had already suggested further cut in oil prices to get the benefit of falling oil price in the international market.
He expected that price of many other items including transport fares and consumer products would fall with the price cut of Fuel oils.
He, however, ruled out any chance of reduction of electricity tariff.
There was a move to increase the price of electricity by almost 100 per cent since the government was generating substantial portion of electricity from costly rental power plants based on fuel oils.
Muhith said the price of electricity would not increase as it was planned following the cut in oil prices.
Although the government had committed to cut oil prices substantially in quick succession because of falling price in the global market, it was yet to go by the commitment.
Price of fuel oil in the international market is still less than $50 per barrel. The price was $100 per barrel two years ago.
It seems that the energy division is maximising its earnings from sales of oils at high price purchasing those at low price from the international market.
Bangladesh Petroleum Corporation, the country’s lone entity to import and market fuel oils, is making huge profit, said Muhith.
Once a loss-making entity, the corporation cleared its all dues it owed to others, he said.
In 2015-16, the corporation made a profit of about Tk 7,500 crore after paying Tk 5,950 crore in tax.
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