Muhith hints at further cut in fuel prices

The government is considering a further fuel price cut to pass on to consumers the benefit of low fuel prices on the international market, said Finance Minister AMA Muhith yesterday.

“Reduction in fuel prices is an ongoing process,” he told reporters during the post-budget briefing at Osmani Memorial Auditorium in the capital.

“I have consulted the issue with the prime minister as she is the energy minister.”

The finance minister however said the rebounding of the crude prices above $50 a barrel had to be taken into consideration carefully.

He said the base price taken into consideration in fixing fuel prices in the local market could not be brought down to the level of current crude oil prices. The base price is about $82 a barrel.

“It will be appropriate if we manoeuvre carefully before moving from the base price,” the minister observed.

On April 24, the government cut the prices of octane and petrol by Tk 10 a litre and diesel and kerosene by Tk 3 per litre. On March 31, the government cut the price of furnace oil, mostly used by industries and power plants, by more than 30 percent to Tk 42 a litre.

The cut was part of a government plan to reduce the fuel prices in three phases. Further reduction in fuel prices would be made if consumers benefit from this price cut and the prices of products and services that depend on fuel ultimately go down, according to energy ministry officials.

The energy ministry is particularly interested in seeing if the transport fares drop following the price cuts in the first phase. However, transport fares have not gone down as expected since the cut.

Despite the cut, the Bangladesh Petroleum Corporation will still make a profit of Tk 27.75 a litre on octane, Tk 23.5 on petrol, Tk 15.75 on diesel and Tk 16.75 on kerosene.