Govt won’t cut oil price due to upward trend in market

The government will not cut fuel prices though it had previously announced to do so, the state minister for power and energy said today.

“We had planned to reduce fuel prices in two phases but not anymore as oil price is now showing an upward trend in the global market,” Nasrul Hamid said.

The state minister also referred to a World Bank forecast which says the oil price would show the upward trend in the next one year.  

He was speaking at an agreement signing ceremony at the Secretariat in Dhaka.  

In December, Finance Minister AMA Muhith announced that the government may lower the prices of fuel oil by a “small margin” in January.

He however added: “Price of fuel oil increased in the international market this December. So, the rate of reduction will not be much.” 

In April, Bangladesh cut the prices of octane and petrol by Tk 10 per litre and diesel and kerosene by Tk 3, with the intention of passing on the benefits of low prices on the international market to consumers in the country.

At that time, the government said the cut was part of a government plan to reduce the fuel prices in phases.

In November, the issue of fuel price cut was discussed at a meeting of the Fiscal Coordination Committee, which favoured another fuel price cut. Accordingly, the cut was scheduled for December.

In October, the World Bank raised its 2017 forecast for crude oil prices to $55 per barrel from $53 per barrel as members of the Organization of the Petroleum Exporting Countries (OPEC) prepare to limit production after a long period of unrestrained output.

Oil prices have increased in recent weeks.

Brent crude futures, the international benchmark for oil prices, were up 17 cents $55.64 a barrel today, according to Reuters.