After being thrust into crisis by the Covid-19 pandemic, the country’s aviation industry is now facing massive thrust for abnormal jet fuel price hike. Bangladesh Petroleum Corporation (BPC) has increased the fuel price to Tk 111 from Tk 48 per litre or 141 per cent in the last 19 months. The frequent enhancement of the jet fuel price may create a negative impact on the domestic aviation industry struggling to rebound from the shocks of the pandemic. Surprisingly, the cost of jet fuel for international flights remains unchanged.
Local airlines operating domestic flights would suffer significant blows as a result of this jet fuel price hike. The sector insiders said that passengers flying domestic would have to spend more money owing to the price hike. Padma Oil Company has raised jet fuel prices for the 15th time in 19 months. Last month, the price of jet fuel for both international and local flights was raised by Tk 6 per litre. The price of jet fuel, which accounts for up to 46 per cent of an airline’s operational costs, was Tk 48 per litre in December 2020. Aviation Operators Association of Bangladesh (AOAB) said that there is no rationale for BPC’s decision to raise jet fuel prices when the price of jet fuel in the world market remains stable. BPC is making a monopolistic choice to raise the price of aviation fuel and we have nothing to say about it.
Overall, the aviation sector is under pressure right now for a variety of reasons, including regular hikes in jet fuel prices, which account for 40 to 46 per cent of an airline’s operational costs. If the ticket price increases, the aviation industry will lose passengers. If the aviation business fails, the tourist and hospitality sectors, which employ 40 lakh people, will also suffer. To make the price go down, alternative and green fuel production need to ramp up significantly and new types of sustainable aviation fuel must come to the market.
