BANGLADESH Petroleum Corporation (BPC) is reportedly making a whopping profits from Tk 13 to Tk 36 per liter of petroleum products in the wake of a global slide in fuel oil prices since June last year. Now BPC’s cost for per liter octane stands, as a news report said, at Tk 56.85 but users are buying at Tk 99, giving the state-run organization a profit of Tk 35.49 per liter. So also profits from per liter of kerosene stands at Tk 13.77, diesel Tk 14.68, furnace oil Tk 19.57 and jet oil Tk 18.75 respectively. It appears that the government is making hefty profit from petroleum products, which may stand this year (2014-15) at more than Tk 2,000 crore breaking past records. Budgetary figure shows that the government has earmarked Tk 2,400 crore for subsidies to petroleum products this year but as per the market information it may require only Tk 200 to Tk 300 crore leaving the remaining money free to be used in other economic sub-sectors.
There is no denying of the fact that the global oil prices have almost halved bringing down the government expenditure on petroleum imports down to that much lower. But the very pertinent question here is that despite the lower petroleum prices, the government is not lowering it to reduce some burden of the users. There is no concern for subsiding the loss now as the government has always claimed in the past. There is room to bring it down as the profit figures against every fuel oil items such as octane, kerosene, diesel, furnace oil and jet oil shows. News reports said India has already lowered the prices of its petroleum products twice and a renewed price adjustment is under way in the new budget. We believe the government is having the flexibility to lower the prices as it has always raised it in the past showing higher price quotes in global market.
Some policy makers however may say that the government is paying huge subsidies to power sector and a reduction in the cost of oil prices will now allow transferring some money to support higher electricity production cost. Here again expert opinion is that any decline in prices of furnace and diesel oil is equally helpful to reducing cost of electricity generation.
Moreover, as we see, the reckless passing over of high cost of power generation by private sector producers on electricity users can hardly be justified. This is because they are using the cover of the state to slice users under unsolicited contracts and users are forced to pay for it. So users claim for cost reduction of fuel oil prices and also electricity prices is squarely justified. We hope the authorities concerned would look into the matter.
