Prices of petroleum fuel to be adjusted in every 3 months

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The government is likely to introduce a permanent pricing formula on the sale of petroleum fuels on the domestic market through periodic adjustments - upward or downward, reports UNB.
According to official sources, Energy Division of the Power, Energy and Mineral Resources Ministry is now devising such formula to provide a permanent solution to the problem that government has been facing for long in dealing with the fuel-price adjustments.
Under the arrangement, every three months a regular adjustment would be made to the local price of petroleum to keep it on a par with the international rates, thereby reducing government subsidy for the sector.
The government enhanced the prices of all kinds of petroleum fuels by about 35 per cent with effect from July 1 when the overseas petroleum prices crossed US$150 per barrel.
During this upward adjustment of prices, the government said that it would cut down government subsidy by Tk 70 billion from the total requirement of Tk 170 billion a year if the latest price level persisted.
But, after that adjustment, the international price level came down to US$100.
In view of the volatile international petroleum market, the present caretaker government moved to put in place a flexible permanent pricing formula.
Sources said the first benefit of the new pricing formula might go to the consumers of octane and petrol who were now buying the two products at rates than higher international prices.
It meant the local price of octane and petrol would fall if such adjustment took place soon as those two products were selling at higher rates on the local market than international market prices.
When contacted, Chief Adviser's Special Assistant for Power and Energy Ministry M Tamim admitted to his ministry making such a move.
He said the Energy Division was now very intensely examining the whole issue as to what kind of impact it would bring on the local market and also other sectors.
"The local petroleum price will be looked into in the light of the international price. This is the main theme of the new permanent formula," he told the news agency.
He, however, noted that the pricing formula would work every three months if the gap between local and international market prices was more than two per cent.
The consumption of octane and petrol was very low in the country - only 100,000 tonnes. This was very insignificant compared to the total requirement of petroleum fuels, said an official of the Energy Division.
The country's total annual requirement of all kinds of petroleum fuel, including diesel, kerosene and jet fuel, was 3.6 to 3.8 million tons a year.