The New Nation - Internet Edition

Staff Reporter

The caretaker government yesterday increased the prices of fuel oils by 35 per cent.

The fuel oil prices were increased by the caretaker government for the second time during its tenure after a gap of 15 months. Earlier in April last year, the prices of petroleum products were increased ranging from 13 to 21 per cent.

An official press release yesterday said that the government re-fixed fuel prices in the wake of price hike of fuels globally.

With the re-fixation of the fuel prices, the release said, the price of per litre octane will be Taka 90, petrol Taka 87, kerosene Tk 55, diesel Tk 55, furnace oil Tk 30 and the price of per cylinder LPG will be Tk 1,000, which is now Tk 67, Tk 65, Tk 40, Tk 40, Tk 20 and Tk 600 respectively.

The new fuel prices will be effective from today (Tuesday), the release added.

The price of a litre diesel and kerosene will be Tk 55, up 37.5 per cent or Tk 15 from the earlier Tk 40.

The new price of octane was fixed at Tk 90 per litre, up 34 per cent or Tk 23 from the previous Tk 67. On the other hand, a litre of petroleum will cost Tk 87, up 34 per cent or Tk 22 from the previous Tk 65.

Each cylinder of liquid petroleum gas (LPG) price now will be Tk 1,000, up from Tk 600, while each litre furnace oil will be Tk 30, up from Tk 20.

Due to the worldwide price hike of fuels, the release said, the subsidy on the fuel price surpassed all limits of the government budget, the press release said.

When the government re-fixed the fuel price last time in April 2007, it said, the price of per barrel crude oil was US$60, but the price now reached US$142. Besides, the price of other refined oils, including diesel, has increased in the world market.

Bangladesh Petroleum Corporation is now importing per litre diesel at US$186. As a result, the release said, the purchase price of per litre octane, petrol, diesel and kerosene stands at Tk 90 to 95 and subsidy on per litre fuel is Tk 23 to 55.

If fuel price remains stable at the present level in the world, the government subsidy on fuels will be Tk 17,000 crore in the 2008-09 fiscal year, the release said. With the providing of subsidy money, the amount of credit would be increased to a great extent and development of different sectors, including education, health, food, communication, power and gas, will be halted.

In this context, the release said, there is no alternative to raising fuel prices. Different countries in the world, including the neighbouring countries, have increased the fuel price several times in last 15 months which is much more than the present fuel price in Bangladesh.

The price of per litre diesel in India, Sri Lanka, Nepal, Malaysia and Indonesia is Tk 57.30, 70.40, 69.69, 54.33 and 80.78 respectively, the release said. If fuel price in Bangladesh is kept less than neighbouring countries then there will be a possibility of smuggling of fuels, especially diesel, to those countries, the release said.

It said since there is massive use of diesel in transporting low-income people, and use of kerosene exists in rural areas, the government subsidy on the two commodities will continue despite their price hike.