Staff Reporter :
The government has backtracked on its plan to cut prices of petroleum products amid a rise in global crude oil prices.
“Right now, the government has no plan to cut oil prices as oil prices are now showing an upward trend in the global markets,” Nasrul Hamid, State Minister for Power, Energy and Mineral Resources, told reporters at the Secretariat in Dhaka on Wednesday.
He said, “Previously, we had planned to reduce domestic fuel oil prices in two phases considering continuous fall in global crude oil prices. But oil price is now showing an upward trend in the global market forcing the government to abandon the plan.” The state minister also referred to a World Bank forecast which says the global oil price would show the upward trend in the next one year following supply cut by major oil producing countries.
In October last year, the World Bank says crude oil prices would go up to $55 per barrel from $53 per barrel as members of the Organization of the Petroleum Exporting Countries (OPEC) prepare to limit production after a long period of unrestrained output.
In December last year, Finance Minister AMA Muhith announced that the government may lower the prices of fuel oil by a “small margin” in January.
He added, “Price of fuel oil increased in the international market this December. So, the rate of reduction will not be much.”
Global oil prices started tumbling in 2014 amid a persistent supply glut to below $30 a barrel in early 2016.
They have rebounded since then to about $55 a barrel on signs the glut may be easing. However, they remain below the record highs of 2008.
In April last year, Bangladesh cut the prices of octane and petrol by Tk 10 per litre and diesel and kerosene by Tk 3 to pass on the benefits of low prices on the international market to local consumers.
After the reduction, a litre of petrol costs Tk 86, octane Tk 89 while a litre of diesel and kerosene cost Tk 65.
At that time, the government said the cut was part of a government plan to reduce the fuel prices in phases.
In November last year, the issue of fuel price cut was discussed at a meeting of the Fiscal Coordination Committee, which favoured another fuel price cut. The cut was scheduled for December.
Brent crude futures, the international benchmark for oil prices, were up 17 cents $55.64 a barrel on Wednesday, according to Reuters.
