Kazi Zahidul Hasan :
Bangladesh Petroleum Corporation (BPC) last week proposed for a fresh fuel price hike as the solution to the recent rise in global crude oil prices.
The proposal, however, drawn severe criticism from experts and consumer rights activists.
They said BPC did not reduce fuel price when oil price fell in the global market but increasing the rate significantly as soon as oil price goes up in the international market. Furthermore, they also said that the new adjustment in fuel price would be impractical, as BPC has been making huge profit in recent years.
“BPC has a tendency to immediately hike fuel price when price goes up slightly in the international market. However, it is reluctant to reduce the fuel price proportionately when oil rate falls,”
Prof Shamsul Alam, Adviser of Consumers’ Association of Bangladesh (CAB) told The New Nation yesterday.
He added: “The tendency of adjusting fuel price is completely unrealistic and unscientific.” The price hike proposal is impractical because it has come at a time when the state-owned entity is making profit.”
BPC made a profit of Tk 4,212 crore during fiscal year 2014-15, Tk 6,342 crore during fiscal year 2015-16 and Tk 4,399 crore during fiscal year 2016-17, according to an official statistics. Currently, it is incurring a loss of more than Tk 10 crore every day following the rise in the prices of petroleum products on the international market.
In this context, BPC in its proposal sent to the energy division last week suggested for a 31 per cent increase in the price of per-litre furnace oil and 11 per cent in diesel and kerosene prices.
It, however, did not seek any hike in the domestic prices of petrol and octane.
“BPC should place the proposal first to the energy regulator, Bangladesh Energy Regulatory Commission (BERC). Any proposal of fuel price hike through the ministry is unlawful,” Prof Shamsul Alam.
He raised the issue of transparency in the BPC’s book of accounts saying that officials of the corporation resorted to corruption showing actual profit or losses for their personal gain.
Opposing the BPC’s move, energy expert Prof M Tamim said the corporation did not reduce the domestic prices of petroleum products rationally when global oil prices hit their lowest level. “BPC remained silent while making big profits from falling global prices and now it is going to increase fuel prices in hasty manner again excusing rise in global oil prices. Such move previously lacked transparency and accountability, as all these came through without independent audit raising question over its profit and loss accounting.”
He said BPC should go for automatic price adjustment when the fuel oil prices were low and were going up in the international market to avoid losses.
The government increased the prices of diesel and kerosene by Tk 24 per litre to Tk 68 between January 24, 2011 and January 4, 2013 on the grounds of oil price hikes in the international market. It also raised the prices of furnace oil by Tk 34 per litre to Tk 60, petrol by Tk 22 per litre to Tk 96 per litre and octane by Tk 22 per litre to Tk 99.
The government, however, reduced the prices of fuel oils by an insignificant amount when the fuel oil prices started going down from its peak in June 2014, when the price of Brent Crude was $117 barrel.
People, however, did not get the benefit from the reduction in fuel oil prices in April 2016, when the government reduced the prices of diesel and kerosene by only Tk 3 per liter, petrol and octane by Tk 10 and the furnace oil by Tk 18 in March in that year.
Bangladesh Petroleum Corporation (BPC) last week proposed for a fresh fuel price hike as the solution to the recent rise in global crude oil prices.
The proposal, however, drawn severe criticism from experts and consumer rights activists.
They said BPC did not reduce fuel price when oil price fell in the global market but increasing the rate significantly as soon as oil price goes up in the international market. Furthermore, they also said that the new adjustment in fuel price would be impractical, as BPC has been making huge profit in recent years.
“BPC has a tendency to immediately hike fuel price when price goes up slightly in the international market. However, it is reluctant to reduce the fuel price proportionately when oil rate falls,”
Prof Shamsul Alam, Adviser of Consumers’ Association of Bangladesh (CAB) told The New Nation yesterday.
He added: “The tendency of adjusting fuel price is completely unrealistic and unscientific.” The price hike proposal is impractical because it has come at a time when the state-owned entity is making profit.”
BPC made a profit of Tk 4,212 crore during fiscal year 2014-15, Tk 6,342 crore during fiscal year 2015-16 and Tk 4,399 crore during fiscal year 2016-17, according to an official statistics. Currently, it is incurring a loss of more than Tk 10 crore every day following the rise in the prices of petroleum products on the international market.
In this context, BPC in its proposal sent to the energy division last week suggested for a 31 per cent increase in the price of per-litre furnace oil and 11 per cent in diesel and kerosene prices.
It, however, did not seek any hike in the domestic prices of petrol and octane.
“BPC should place the proposal first to the energy regulator, Bangladesh Energy Regulatory Commission (BERC). Any proposal of fuel price hike through the ministry is unlawful,” Prof Shamsul Alam.
He raised the issue of transparency in the BPC’s book of accounts saying that officials of the corporation resorted to corruption showing actual profit or losses for their personal gain.
Opposing the BPC’s move, energy expert Prof M Tamim said the corporation did not reduce the domestic prices of petroleum products rationally when global oil prices hit their lowest level. “BPC remained silent while making big profits from falling global prices and now it is going to increase fuel prices in hasty manner again excusing rise in global oil prices. Such move previously lacked transparency and accountability, as all these came through without independent audit raising question over its profit and loss accounting.”
He said BPC should go for automatic price adjustment when the fuel oil prices were low and were going up in the international market to avoid losses.
The government increased the prices of diesel and kerosene by Tk 24 per litre to Tk 68 between January 24, 2011 and January 4, 2013 on the grounds of oil price hikes in the international market. It also raised the prices of furnace oil by Tk 34 per litre to Tk 60, petrol by Tk 22 per litre to Tk 96 per litre and octane by Tk 22 per litre to Tk 99.
The government, however, reduced the prices of fuel oils by an insignificant amount when the fuel oil prices started going down from its peak in June 2014, when the price of Brent Crude was $117 barrel.
People, however, did not get the benefit from the reduction in fuel oil prices in April 2016, when the government reduced the prices of diesel and kerosene by only Tk 3 per liter, petrol and octane by Tk 10 and the furnace oil by Tk 18 in March in that year.
