Bangladesh to cut fuel oil prices 'soon' again

A decision in principle to reduce fuel oil prices in order to strengthen the country's economy will be finalised soon, Finance Minister AMA Muhith has indicated.

"The issue of cutting down on oil prices was discussed at a coordination council meeting. Now we will prepare the papers and send those to the energy ministry," Muhith said on Thursday.

"The matter will be finalised after discussions with the prime minister when she returns," he told reporters after a delegation of the International Monetary Fund met him at the Secretariat on Thursday.

Prime Minister Sheikh Hasina returned home earlier in the day after attending the COP 22 UN Climate Change Conference at Marrakesh in Morocco.

On Monday, the Fiscal Coordination Council decided in principle to reduce fuel oil prices. The decision, according to media reports, will come into effect next month.

Muhith said ways to speed up GDP growth rate while continuing the current economic management system were discussed at the meeting with the IMF delegation.

He said the country’s exports and investment were improving.

"The economy will get stronger if the fuel oil price is cut slightly," he added.

In his opinion, there was 'no big change' when fuel oil prices were cut in April.

"We reduced the oil price slightly. We cut furnace oil price. The other price reductions were nominal," he said.

Asked by how much the prices of fuel oil would be reduced, the finance minister said, "We'll have to sit (to re-fix the prices). The energy ministry has been told about this."

Muhith said the government had recovered the losses accrued through subsidies given for fuel oil. "No loss, more than covered. The government has even received its dues," he said. 

On Apr 24, the prices of diesel and kerosene were brought down by Tk 3 a litre, and octane and petrol by Tk 10.

Ten days before the cut, the price of furnace oil was reduced from Tk 60 to Tk 42 a litre.

When the finance minister's attention was drawn to allegations that general people did not get the benefit of fuel oil price reduction, Muhith said, "The commoners will get the benefit. Everything will get cheaper."

He mentioned power as an example. "We will revise power price. Now after the cut in fuel oil price, this (power price) will not be hiked much. Otherwise, it could double." 

"And transport (fares will also come down)," he added.

Muhith said oil was one of the basic things in an economy. "Energy is behind our recent growth. We were able to provide it. There will also be a decision on power price after the one on fuel oil price."

He regretted 'the failure' to find a way to provide cheaper power.