Oil price cut likely in next budget

The government will cut oil prices to some extent next budget to pass on the benefits of the steep fall in fuel prices in international markets to the customers.

Finance Minister AMA Muhith yesterday said the government has not adjusted the prices, although global oil prices plunged some time ago.

“We have not reduced the prices because we give a lot of subsidies in importing oil. However, we will adjust the prices to some extent in the next budget,” he said at a meeting with a delegation of the Dhaka Chamber of Commerce and Industry (DCCI) at the secretariat.

Since July last year, crude oil prices plunged from over $110 a barrel to $45 a barrel in January this year on weak global demand. Prices are currently hovering at around $65 a barrel.

Riding on the back of sliding global oil prices, Bangladesh Petroleum Corporation (BPC) bucked its five-year losing streak this fiscal year, making a tidy profit of Tk 3,455 crore.

Although oil imports were higher in fiscal 2014-15 compared to a year ago, the government had to spend less thanks to the fall in global prices.

BPC is making a whopping profit of Tk 13 to Tk 36 a litre on petroleum products.

The profit margin is Tk 13.77 a litre for kerosene, Tk 14.68 for diesel, Tk 19.57 for furnace oil and Tk 18.75 for jet fuel.

As global oil prices took a freefall from last June, both the World Bank and the International Monetary Fund pursued the Bangladesh government to deregulate domestic oil prices and introduce a system that makes automatic adjustment of oil prices in line with global market rates.

DCCI President Hossain Khaled led the delegation at the meeting.