Fuel price hike may be necessary if Middle East war drags on: information advisor

The situation depends on whether the US and Iran can resolve their conflict, says Zahed-Ur-Rahman

Information Advisor Zahed Ur Rahman says the government may be forced to raise fuel prices if the war in the Middle East persists.

"Considering the circumstances, the issue of adjusting the price of fuel oil may come to the fore,” he said in response to a question from the media at the Secretariat on Thursday.

Asked whether the price of fuel would go up, the information advisor said: “I am not sure whether the price will actually increase. But you are all well-connected people. You are noticing that the war in the Middle East may take a turn for the worse. Then again, we see that Donald Trump saying that the situation may improve too. The current situation is that ships are being blocked in the Strait of Hormuz by both Iran and the US. So, if this persists, if it continues for a long time, the situation will be quite bad. Then it becomes difficult for us to continue subsidising fuel for a very long time.”

"We will not increase the price in April. I have already said that, if this continues, some adjustment in the price may be necessary. I repeat, it may be necessary. By that I do not mean that it will happen. Please, I hope you do not make any misleading photo cards. It may be necessary. Again, I mean… Donald is not very predictable. If they have talks, if an agreement is reached, then everything will be fine."

Asked about fuel oil amid the Eastern Refinery closure, and the nationwide shortage, he said: "There has been some pressure on supply due to temporary disruptions in the operations of the country's only state-owned oil refinery, Eastern Refinery. Usually, about 25 percent of the country's total fuel oil demand is supplied from this refinery, especially petrol and octane.

"The situation is under further pressure as a consignment of 100,000 tonnes of fuel oil from Saudi Arabia could not reach the country on time. However, another consignment is scheduled to reach the country in early May."

The information advisor said, "Now the question is whether there will be a crisis because we mainly get our petrol and octane from our Star Refinery. You yourselves have reported the crisis at the refinery in the newspapers. So far, we have stock as before. The refinery can run for that many days. As such, the government has done the work of refining petrol and importing sufficient amounts. That is why the crisis… it is not that there will be no problems. There is actually a slight supply crisis. But there were predictions that it would run out, that the refinery would close. That is why the government has made reserves of refined petrol.”

"As a precautionary measure to deal with a possible crisis, the government has already increased the import and stock of refined fuel oil. The issue was also discussed in a high-level meeting with the prime minister. However, a different situation can be seen at the field level. Long lines have been observed at petrol pumps in various areas, including the capital. In many cases, it has been noted that the same vehicles are repeatedly collecting oil or buying several times more oil than required. This is putting pressure on the normal supply system."

Quoting a leading daily newspaper report, Zahed said, "A petrol pump salesman said that the amount of oil that used to be sold throughout the day is now gone within four hours."

"Although supply at petrol pumps has not been reduced, stocks are running out quickly due to excess demand. Specific information on pump-based supply will be released soon."