Bangladesh finalises 'formula' for setting fuel prices

Bangladesh is set to move to a more flexible rate for fuel that adjusts more quickly to changes in the international market

Published : 17 Oct 2023, 02:48 PM
Updated : 17 Oct 2023, 02:48 PM

A new formula has been finalised to determine the price of fuel oil in coordination with the international market, according to State Minister for Power, Energy and Mineral Resources Nasrul Hamid.

“We have established a formula based on the indexing formula used by oil companies,” the state minister said in response to a question at a workshop on Tuesday.

“I have sent the pricing formula to the Ministry of Finance. Once they reach a decision, we will provide more details. We cannot speak on this matter at this time. An election is coming; maybe something will be done afterwards.”

The prices of petrol, octane, and diesel kerosene were hiked by over 50 percent last year in coordination with the international market as the government attempted to cut losses. Though the price in global markets fell later on, the fuel prices were not adjusted downwards. For a few years before this, fuel was sold in Bangladesh at prices higher than in the international market.

The government claims it has been selling fuel at a low price for an extended period, even when prices on the international market are high. As a result, the price was kept high to overcome the losses incurred during that period.

However, the Ministry of Power recently announced that the price of fuel oil will be adjusted every month in line with the international market.

Despite concerns about energy security amid the start of the Israel-Palestine conflict, there is no alternative initiative on the matter, State Minister Hamid said.

A large part of oil and gas shipments to Bangladesh come from the Middle East, but we are still determining if the fuel situation will worsen because of the conflict, he said.

However, he added that it is a matter of concern, and there is no telling which way things will go.

“There is no alternative. The source of oil and fuel is one part of the world. Everyone is concerned. All countries will be affected.”

The state minister also added that the Rooppur Nuclear Power Plant will be added to the national grid by September of next year, adding that the transmission lines are still being prepared.