Al Amin :
The domestic aviation industry is struggling to survive due to unusual rise in jet fuel price, the sector insiders said.
They said that Padma Oil Company Limited, a subsidiary of the Bangladesh Petroleum Corporation (BPC), has increased jet fuel price by Tk 19 – to Tk 130- for only domestic flights, which was Tk111 last month.
On the other hand, the cost of the jet fuel for international flights remains unchanged at $1.22 per litre, which has created a difference between the fuel prices for domestic and international airlines by around Tk15-16 per litre.
As a result, an uneven competition has been created in the aviation fuel charges, which accounts for up to 46 per cent operational costs of the airlines, they said.
On the other hand, the airline companies are unable to hike travel fare in line with the jet fuel price fearing reduction of passengers, which have already declined in domestic routes, except Cox’s Bazar, even in the Eid vacation, they said.
Passenger pressure has dropped sharply in three routes-Barishal, Jashore and Sylhet-during the Eid-ul-Azha holidays, the sector insiders said.
Kazi Wahidul Alam, former Director of Bangladesh Biman, told The New Nation, “The BPC is increasing the jet fuel price to cope with global price. But, the local airlines companies will not survive, if such an uptrend in fuel price continues.”
“Considering the industry’s situation, the government should reduce tax and VAT on jet fuel to relieve the aviation entrepreneurs,” he said.
Padma Oil Company has raised jet fuel prices for the 16th time in 20 months, according to sources in different airlines in the country.
Late last month, the price of jet fuel for local flights was raised by Tk 6 per litre.
The price of jet fuel was Tk 48 per litre in December 2020. The sky-high jet fuel prices hit the domestic aviation companies.
The jet fuel costs are linked to global crude oil prices and it has risen steadily as a result of the Russia-Ukraine war.
Airlines have been under pressure since the onset of the Covid-19 pandemic.
Kamrul Islam, General Manager of
US-Bangla Airlines said, “We have no alternative but to increase airfare in order to adjust operational costs.”
“The aviation sector, a three per cent contributor to the country’s GDP, is now on the verge of destruction due to the BPC’s unwise decision,” he said.
“BPC is making a monopolistic choice to raise the price of aviation fuel and we have nothing to say about it. But, by what logic did BPC raise the price of jet fuel for solely domestic flights?” Kamul said.
“Overall, the aviation sector is under pressure right now for a variety of reasons, including regular hikes in jet fuel price, which accounts for 40 to 46 percent of an airline’s operational costs,” he said.
