The government has initiated a move for readjusting domestic prices of fuel oils in line with their price slump in the global market, officials said.
Under the initiative, the authorities concerned have already started assessing various factors, like - payment of subsidy for marketing fuel oils, existing rates of customs duty and other taxes, and current prices of different petroleum products in the local market.
"Prices of both crude and refined petroleum products have declined in the global market. We need to rationalise their prices in the domestic market in line with their global prices," Finance Minister A M A Muhith wrote in a recent note.
In his note, supposedly in favour of cut in fuel prices, the minister noted that the government has made enough profit through selling different fuel products.
Besides, the financial condition of Bangladesh Petroleum Corporation (BPC) and Eastern Refinery Ltd (ERL) are now sound.
The finance minister's note has already been sent to the authorities concerned, including the Finance Division and the National Board of Revenue (NBR).
He also mentioned that the domestic petroleum prices are subsidised in various ways. Apart from the direct subsidy, the government also provides different types of product-specific subsidies.
The minister sought to know the current retail prices of different fuel oils, the government-fixed dollar prices of crude petroleum, and amount of debts or dues of BPC and ERL to and from the government.
Besides, the rates of duties and taxes, levied by NBR, and debts and liabilities of the two agencies with NBR have also been asked in the note.
The profit of BPC stood at Tk 34.55 billion in the fiscal year (FY) 2014-15, in a turnaround from a massive financial loss of Tk 23.21 billion in the previous fiscal due to drastic fall in oil prices in the international market.
According to estimation, the volume of BPC's profit will stand over Tk 60 billion in the current FY.
The government had paid a large sum of subsidy every year for long because of the mismatch between procurement and domestic marketing prices of fuel oils.
On November 16, 2015, the price of per-barrel gasoil (diesel) was US$ 53.96 in the global market, while that of per-barrel jet fuel/kerosene and octane (mogas) was $53.90 and $55.21. The price of per tonne of furnace was $220.97.
Currently, diesel and kerosene are selling at Tk 68 per litre, while octane, petrol and furnace at Tk 99, Tk 96 and Tk 60 a litre respectively at retail level in the local market.
At present the government is facing domestic and international pressures for readjusting the prices of different fuel oils in the local market in line with their international prices, an expert said.
"Oil prices have fallen significantly in the international market. We'll have to revise them as well," the finance minister told reporters in August after a meeting with IMF Executive Director Rakesh Mohan at his office.
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