OIL PRICE CUT : Muhith wants policy before downward revision of price

Finance minister AMA Muhith has once again ruled out possibility of immediate downward adjustment of fuel oils prices in the local market while such demand is getting louder with the continuous fall of prices in the global market.
At a meeting with leaders of the Metropolitan Chamber of Commerce and Industries at his office on Sunday, he said a policy would be formulated before downward adjustment of fuel oils prices.
He, however, could not confirm when the policy would be ready.
The local consumers were paying highest price for fuel oil in the South Asia region since 2013 and deprived of the benefits of plummeting oil prices in the international market.
Domestic prices of petroleum products were last adjusted in January 2013.
In December, international oil price reached the record low of US$ 36 per barrel in last one decade enabling the state-owned Bangladesh Petroleum Corporation to make windfall profits.
Earlier, MCCI president Syed Nasim Manzur urged Muhith to reduce fuel oil price in the local market which would pull down the cost of doing business in Bangladesh.
On the same day, local think-tank Centre for Policy Dialogue said the government should make downward revision of oil prices for the benefit of the economic growth and the private investment.
CPD while revealing the half yearly economic review in the city said both economic growth and private investment would rise by 0.3 per cent if the petroleum price is reduced by 10 per cent.
Its distinguished fellow Debapriya Bhattacharya said the government should allow the consumers and other stakeholders to enjoy the benefit of lower fuel price in the international market.
It was also assessed by the CPD that overall household consumption would increase by 0.6 per cent while RMG export would see 0.4 per cent increase.
The point-to-point inflation was expected to come down by 0.2 percentage points while the government savings might deplete by 0.4 per cent following the possible cut down in oil prices, it said.
CPD also assessed that BPC’s profit might stand at Tk 11,000 crore by the end of this fiscal year from that of Tk 5,268 crore in the last fiscal if the government do not cut down prices of fuel oils.
On December 22, chief economist of Bangladesh Bank Biru Paksha Paul suggested for reducing fuel prices in line with global rates to boost investment in the country.
He noted that the biggest challenge for enhancing investment was the interest rates on loans which could be reduced following downward adjustment of fuel oil prices.

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