THE government has finally cut petrol and octane prices by Tk 10 while per litre and that of diesel and kerosene by Tk 3 per litre in the backdrop of the drastic fall in petroleum prices in the international market. The cut is welcome but it is not enough in view of the huge fall in fuel prices at global market.
The cut in oil prices came after the Finance Ministry’s proposal to slash the prices of octane and petrol by 15 percent and that of diesel and kerosene by 25 percent. But the strategy to cut fuel prices apparently in three phases led to the small cut at the beginning. But many fear that ordinary people may not get any benefit if the price reduction goes at a snails pace as the transport owners may not feel obliged to reduce the fare citing minor changes in oil prices.
The call for adjusting oil prices on the local market was getting louder since mid-2014 when petroleum prices started falling on the global market. Oil prices plummeted 66 percent on the international market since June 2014. In January this year, it dropped as low as $27.65 a barrel before rebounding to $40 recently. But the government was reluctant to adjust the prices downward asking Bangladesh Petroleum Corporation (BPC) to repay first its earlier loans and recoup the losses it incurred from early 2000. The government recently agreed to reduce fuel prices after the BPC said its entire bank loans had been repaid, and that it was counting profits.
Energy Ministry officials said further reduction in fuel prices would be made if consumers benefit from this price cut and the prices of products and services that depend on oil consumption ultimately go down. Earlier, the Energy Ministry cut the price of furnace oil by Tk 18 per litre to Tk 42 from Tk 60 following the Cabinet decision. After slashing the furnace oil price, the cost of electricity generation had come down but the tariff of electricity has rather increased. The Power Development Board received electricity at a much lower price from the government-approved private power companies but the increase of power tariff did not reflect the price adjustment in the government entity.
When the government said it would further reduce the fuel price if the transport fares come down is a rather vague statement. Transport owners operate under the government and they have enough scope to reduce fares acting on reduction of the fuel price. In our view the government should make the benefit of lower fuel price accessible to common people instead of tolerating transport owners to stay back to stop from further reduction of fuel prices. People paid exorbitant fuel prices when its prices were too high. It has come down now and they have the right to benefit from it.
