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Fuel prices to go down by September

24 August,2015

RTNN News Desk: Finance Minister AMA Muhith has hinted at revising oil prices at retail level within a month in line with the prices in the global market.

“First I will sit with the Energy and Power Division, which has already prepared the papers for revising oil prices. Then, I will meet the Energy Commission to set the price,” he told reporter at the secretariat yesterday.

“I have to settle the matter before going to New York in September.”

The price of oil has been plunging in the international market since the middle of last year, reaching levels last seen during the depths of the 2009 recession amid weak global demand and rising output.

Oil price fell from $115 per barrel in June 2014 to around $45 per barrel till date. Opec’s benchmark prices for crude oil have fallen by about 50% since the organisation declined to cut production at a 2014 meeting in Vienna, Austria.

However, the retail consumers in Bangladesh have yet to be benefitted from the slumping oil prices as the government is still to adjust domestic prices with global trends.

The International Energy Agency said in its oil market report that the global demand has been softening at a remarkable pace as the European and Chinese economies falter.

Professor of economics at Dhaka University MA Taslim had earlier said falling oil prices is a boon for Bangladesh.

“Usually, lower oil prices help reduce the cost of living by lowering transport costs and bringing down inflation. Lower oil prices also pass through directly into lower fuel costs and retail electricity prices,” he said.

But since the government is the lone oil importer, consumers’ benefit depends on lowering petroleum prices in the domestic market, he said.

While talking to the Dhaka Tribune recently, finance adviser to a former caretaker government AB Mirza Azizul Islam suggested adjusting prices of petroleum products on a quarterly basis.

“Then again, it is a common phenomena in our country that if the price of anything gos up, we comply, but when prices go down, we do not reduce. This actually results in the needs for subsidy,” the economist said.

Countries such India and Pakistan have already cut fuel oil prices to pass the benefit on to their consumers.

According to the Bangladesh Petroleum Corporation, the country imports around 5.4 million tonnes – one barrel equals 0.13 tonnes – of fuel oil annually, including over 1.3 million tonnes of crude oil for the country’s lone refinery – Eastern Refinery Ltd in Chittagong.

Currently, Bangladesh has the capacity to store up to 1.162 million tonnes of oil. The government plans to enhance the capacity to 1.3 million tonnes by 2016.

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