The government has finally backtracked on its decision to increase the price of jute batching oil (JBO) following frequent requests made by the jute industry, officials said.
JBO is a petroleum by-product which is supplied by the Eastern Refinery Ltd (ERL), the country's lone fuel oil refinery. Jute mills use this oil to soften and process raw jute.
The state-run Bangladesh Petroleum Corporation (BPC) on February 4 last increased the JBO price by 62.5 per cent as the fuel price was fixed at Tk 110 per litre from Tk 67.70 earlier, a BPC official said.
He said the BPC took the decision as it apprehends that JBO is being mixed with edible soybean oil which is very harmful to public health.
But both the public and private jute industries and market experts opposed the decision for the sake of the industry which has been facing hard times due to a fall in global orders.
They also argued that soybean oil cannot be mixed with JBO as it could be easily identified, according to the Bangladesh Jute Spinners Association (BJSA).
The ministry of textiles and jute in a letter sent to the ministry of power, energy and mineral resources last month and requested it to review its decision.
Meanwhile, the ministry of energy on March 3 withheld the decision to increase the price of JBO, said BPC Director (Marketing) Md Mir Ali Reza.
He said the ministry had sent a letter to the BPC in this regard, asking it to withhold the effectiveness of the notification on the JBO price issued on February 4 until further direction.
Bangladesh Jute Spinners Association (BJSA) chairman Md Shahjahan said the energy ministry initiative would be very helpful for the sector which is passing a crucial time.
Orders for jute yarn from fixed destinations fell significantly in recent times, he said, adding that country's jute mills use nearly 30,000 tonnes of JBO annually. Of the total, the spinners use 18,000 tonnes.
Jute yarn sector contributes 65 per cent to total export earnings, he added.
The state-run Bangladesh Jute Mills Corporation (BJMC) and Bangladesh Jute Mills Association (BJMA) also hailed the decision of the energy ministry.
BJMA chairman Muhammad Shams-uz-Zoha said exports by jute sector that crossed $ 1.0 billion in the fiscal year (FY) 2011-12 declined to $ 824 million in FY '14.
Thirty big jute mills had been closed due to fall in orders from importing countries, he said, pointing out that the industry is working hard to turn back.
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