Fuel price cuts benefit vehicle owners, public transport users gain little

Those using public transport have gained little from a fall in fuel prices, though businesses and researchers had raised hopes.

Consumer rights activists and economists have shown that the rich, the upper middle class and transport operators stand to reap the benefits.

The prices of diesel and kerosene have been reduced by Tk 3 per litre, while the price of petrol has fallen by Tk 10 per litre from Apr 25 midnight.

Earlier, on Mar 31, the price of furnace oil had been cut by Tk 18 to a litre.

It is being said that the fuel price cuts would boost the GDP growth rate by 3 per cent and push up readymade garment exports by 4 per cent.

The sum the Bangladesh Petroleum Corporation’s (BPC) loses by way of reduced profits will be picked by those who buy fuel directly such as owners of buses, cars and irrigations pump sets, while lower-income consumers are unlikely to benefit.

Trains, ferries, buses and other modes of transport, and irrigation pumps run on diesel. Those using the fuel and users of kerosene stand to gain from a 4 per cent cut in their prices.

Motor cycle and car owners, whose vehicles run on petrol and octane, are also going to benefit from a 10 per cent cut in petrol and octane prices, but the majority of Bangladesh’s commuters do not own private vehicles and depend on public transport.

Prof Mojib Uddin Ahmed, chairman of the Investment Corporation of Bangladesh, told bdnews24.com: “The benefits of the price cuts are not reaching all but only a few. They are going to benefit those who really were not waiting for them.”

He said there would be a reduction of only a few paisa, if transport fares were to be revised in accordance with the reduced diesel prices.

Ekushe Paribahan’s Managing Director Shamsuddin Farhad said the fare reduction on their Dhaka-Noakhali route would work out to Tk 3.75 per ticket.

He said people expected an appreciable cut because of the fall in the price of diesel but the amount would be disappointing.

An air-conditioned bus ticket for the Dhaka-Noakhali trip run by Ekushe Paribahan is Tk 400 and for ordinary coaches 350, he said.

Fuel oil requirement

Abu Hanif, General Manager of Bangladesh Petroleum Corporation’s marketing and distribution wing gave an indication of the country’s daily fuel oil requirements:

Petrol: 300 MT

          Octane: 320MT

          Diesel: 9,500 – 10,000 MT

Kerosene: 350 MT

Farhad criticised a paltry Tk 3 per litre reduction in the price of diesel. “If the price cut were to benefit farmers and ordinary people it should have been thoughtfully done. People must realise there is not much the transport operators can do.”

Bangladesh Passengers’ Welfare Association General Secretary Mozammel Huq Chowdhury, however, said the small profits of the transport owners would add up to a big amount, but ordinary people had little to gain.

He alleged the diesel price has been reduced in a way to give transporters a reason not to revise fares.

He said the railways were likely save about Tk 100,000 daily but were still harping on losses.

The government should consider further cuts in the diesel price for the benefit of ordinary people, he added.

Railway traffic department Joint Managing Director Matin Chowdhury told bdnews24.com that the railways consumed about 45 million litres of diesel daily and the savings because of the price cut would work to nearly Tk 400,000 each day.

But the railway authorities see no immediate prospect of a downward revision of railway fares.