Decision time on fuel prices
The minister of finance has sought the opinion of the ministry of energy on how to revise prices of petroleum downwards. We fail to comprehend why we are being charge so high a price, especially in light of the fact that price per barrel of oil hit $27.65 on January 21, the lowest since 2003. Putting the burden of unrealistically high priced fuel on the people is in effect, a form of indirect tax. With the re-emergence of Iran as a major player in the oil market, experts believe that the current general lower price of oil in international markets will remain at the level it is now for the near term. The demand for lowering of prices comes due to Bangladesh Petroleum Corporation's (BPC) admission that all its bank loans have been repaid and is now in the green in terms of profit.
So, why is the government foot dragging on the issue? Till date, the bulk of oil purchases have been made from Saudi Arabia and the United Arab Emirates at a fixed rate on a government-to-government basis. Now with oil prices flattening out in the global markets, a fundamental rethinking is required on the current arrangement. Additionally, while revising prices downwards, the government must ensure that the benefit of lower domestic fuel price reaches the end consumer. With a large percentage of electricity being generated by private power plants running on fuel, unless there is a renegotiation of the rate at which government buys electricity, the benefit of lower fuel prices will not trickle down to consumers.