The government has reduced the prices of diesel and kerosene by Tk 2.25 per litre to Tk 106 under the automatic fuel-pricing formula.
The new rate will come into effect today.
However, the prices of octane and petrol have been kept unchanged at Tk 126 and Tk 122 a litre respectively.
The Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) published a gazette about the changes in petroleum prices on Sunday.
The government first introduced the automatic fuel pricing formula on March 7, reducing the prices of diesel, kerosene, octane and petrol.
Bangladesh government will fix the domestic oil prices in every month under the new formula, said a senior MPEMR official.
Previously in March, the government had reduced the prices of diesel and kerosene by Tk 0.75 a litre, or 0.68 per cent to Tk 108.25.
The petrol and octane prices were also cut by Tk 3 per litre to Tk 122 and Tk 4 per litre to Tk 126 respectively.
The price of furnace oil is now Tk 80 a litre, jet fuel US 95 cents a litre, and marine fuel Tk 96 a litre.
The government usually applies Platts' oil product assessments or benchmarks for fixing refined oil products and for crude oil it look at S&P Global Platts's Dated Brent benchmark while buying petroleum products from international market.
The new oil pricing formula aimed at ensuring 'no loss, no profit' for the state-run Bangladesh petroleum Corporation (BPC), said a senior BPC official.
The BPC in late February prepared a guideline on automatic oil pricing under which the prices of all petroleum products will be fixed, he said.
Under the guideline, all types of costs, including international market price, import tax, advance income tax and value added tax, operational expense, administrative and maintenance costs, BPC's margin and distributor's margins will be added before fixing the prices of petroleum products.
The prices of octane and petrol are considered as luxury fuel, under the guideline, and hence their prices should be kept always higher than diesel, it narrated.
The price difference between octane and diesel should be at least Tk 10 per litre in domestic market, it spelled out.
Bangladesh usually imports around 300,000 tonne octane annually to meet domestic demand, while the demand for petrol is made through production from the country's lone crude oil refinery - Eastern Refinery Ltd (ERL) and from condensate fractionation plants.
Since its independence in 1971, Bangladesh was fixing domestic petroleum product prices through executive orders by the government.
The BPC would attain profit from petroleum product trading in most of the years and provide dividend to the government after clearing all debts and liabilities, including taxes and VATs.
The finance ministry would provide subsidy when the BPC incurred a loss in petroleum product trading when the oil prices in international market were high and volatile.
Sources said Bangladesh introduced the automatic oil pricing formula for the first time in line with a recommendation from the International Monetary Fund (IMF).
It was among several conditions for a reduction in subsidies as set by the IMF for a $4.7-billion loan.
Bangladesh already received $476.2 million as the first tranche and $689 million as the second tranches of the IMF loan in February and December 2022 respectively.
The entire amount of the IMF loan is set to be paid in seven installments over three and a half years, until 2026. As such, five more installments are left.
The IMF approved around S$ 3.3 billion under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) and about $ 1.4 billion under the Resilience and Sustainability Facility for Bangladesh.
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