After India, now Bangladesh hikes fuel prices

Dhaka: Bangladesh hiked fuel prices for the second time in the past two months and the third time in the current year at midnight on Thursday to reduce its subsidy burden on petroleum products. An official statement issued late night yesterday said all fuel oils, including diesel, will cost 5 takas a litre more with effect from midnight on Thursday. The statement said prices of diesel and kerosene have been increased from 51 takas to 56 takas a litre, furnace oil from 50 takas to 55 takas, petrol from 81 takas to 86 takas and octane from 84 takas to 89 takas. [caption id=“attachment_128905” align=“alignleft” width=“380” caption=“Reuters”]  [/caption] The latest price hike takes place just 53 days after prices of all fuels — with the exception of furnace oil —were increased by 5 takas a litre and furnace oil prices were raised by 8 takas a litre on 18 September. Energy ministry officials said the hike would cut the government’s subsidy burden on imported petroleum products by 4,000 crore takas. The Bangladesh government was so far providing a 21.39 taka subsidy on every litre of diesel, 21.31 takas per litre of kerosene and 9.97 takas per litre of furnace oil. State-run Bangladesh Petroleum Corporation took a hit of 8,200 crore takas on fuel subsidies last year, even though the government budgets 20,000 crore takas every year toward its fuel subsidy bill. Officials said despite the latest price hike, the government would still have to provide a subsidy of 16.39 takas on every litre of diesel, 16.31 takas per litre of kerosene and 4.97 takas on each litre of furnace oil. According to reports, Bangladesh’s fuel demand stood at 48 lakh tonnes last fiscal and has risen to 68 lakh tonnes in the current fiscal year. The hike came in the wake of warnings by financial watchdogs and experts in recent weeks that there was no alternative to increasing prices to reduce the huge subsidy burden, even though it would impact the budget of the common man.