Govt may raise fuel prices after irrigation season
Thursday, 13 March 2008
FE Report
The government is expected to raise local fuel prices after the current irrigation season concludes to offset the losses caused by skyrocketing petroleum rates prevailing in the international market and help reduce the subsidy to this sector, said special aide to chief adviser M Tamim.
"We are concerned about the overheated fuel prices in the international market. But the consideration to raise the fuel price might not come at least until the completion of the rice irrigation season," he said speaking at the Meet the Energy Reporters session in the national press club in the city Wednesday.
He said the government subsidy only for the energy sector reached around Tk 140 billion against the national budget worth Tk 870 billion.
"Does the government has the capacity to bear such a huge burden?" the Special Assistant to Chief Adviser on energy issues M Tamim asked the journalists attending the programme.
Forum for Energy Reporters, Bangladesh (FERB) organised the programme that was chaired by its chairman Mollah Amzad Hossain.
Tamim's comment on the issue of fuel price hike came on the day when per barrel of crude oil price hit the highest ever at US$ 110 in the international market.
The country's lone state-owned oil importing company Bangladesh Petroleum Corporation has apprehended that its net loss will be over $1.0 billion in the current fiscal year due to the sky- rocketing global crude oil prices.
Pinpointing the amount of energy subsidy, Tamim said the government's subsidy for fuel oil is around Tk 90 billion and Tk 60 billion for fertiliser
But only 20 per cent of the government subsidy benefits the poor, while the remaining 80 per cent enjoyed by the rich, he said.
"But this mode of subsidy cannot go long to sustain the country's economic momentum," Tamim added.
The government is planning to adopt a mechanism so that the subsidy goes only to the poor more specifically the farmers.
The diesel price, in the local market, should have been Tk 80 a litre instead of Tk 40 a litre if the latest hike of oil price in the international market is adhered to, he added.
He, however, said that the government is set to raise the price of compressed natural gas (CNG) by March to bring it into a level similar to other automotive fuel prices.
The government is expected to raise local fuel prices after the current irrigation season concludes to offset the losses caused by skyrocketing petroleum rates prevailing in the international market and help reduce the subsidy to this sector, said special aide to chief adviser M Tamim.
"We are concerned about the overheated fuel prices in the international market. But the consideration to raise the fuel price might not come at least until the completion of the rice irrigation season," he said speaking at the Meet the Energy Reporters session in the national press club in the city Wednesday.
He said the government subsidy only for the energy sector reached around Tk 140 billion against the national budget worth Tk 870 billion.
"Does the government has the capacity to bear such a huge burden?" the Special Assistant to Chief Adviser on energy issues M Tamim asked the journalists attending the programme.
Forum for Energy Reporters, Bangladesh (FERB) organised the programme that was chaired by its chairman Mollah Amzad Hossain.
Tamim's comment on the issue of fuel price hike came on the day when per barrel of crude oil price hit the highest ever at US$ 110 in the international market.
The country's lone state-owned oil importing company Bangladesh Petroleum Corporation has apprehended that its net loss will be over $1.0 billion in the current fiscal year due to the sky- rocketing global crude oil prices.
Pinpointing the amount of energy subsidy, Tamim said the government's subsidy for fuel oil is around Tk 90 billion and Tk 60 billion for fertiliser
But only 20 per cent of the government subsidy benefits the poor, while the remaining 80 per cent enjoyed by the rich, he said.
"But this mode of subsidy cannot go long to sustain the country's economic momentum," Tamim added.
The government is planning to adopt a mechanism so that the subsidy goes only to the poor more specifically the farmers.
The diesel price, in the local market, should have been Tk 80 a litre instead of Tk 40 a litre if the latest hike of oil price in the international market is adhered to, he added.
He, however, said that the government is set to raise the price of compressed natural gas (CNG) by March to bring it into a level similar to other automotive fuel prices.