State Minister for Power, Energy and Mineral Resources Nasrul Hamid Bipu has said the government has no plan to cut fuel prices, throwing cold water on Finance Minister AMA Muhith’s optimism.
The state minister cleared the government stance on the issue in Parliament on Sunday.
Following demands by several quarters after the drop in global crude oil prices to $33 per barrel in 2016, the government lowered the prices of diesel and kerosene by 4 percent and octane and petrol by around 10 percent. Furnace oil price was cut to Tk 42 from Tk 60 a litre.
The government did not respond to demands for more cuts in fuel prices.
Finance Minister Muhith said by the end of last year that steps to cut fuel prices had been taken, but it has not happened yet.
In a media briefing during the spring meetings of the IMF and World Bank Group in Washington in April, Muhith said a proposal to cut fuel oil prices was awaiting Prime Minister Sheikh Hasina’s approval.
But replying to an MP’s query on Sunday, State Minister Bipu told MPs that the prices cannot be cut now in Bangladesh because the global oil prices are going up.
He said Bangladesh Petroleum Corporation may count losses due to devaluation of taka against US dollar if the fuel prices are cut.
“Fuel prices are upbeat in international market for a year and it is continuing. The difference between values of taka and dollar is increasing every day. BPC may slip back into losses in the next fiscal year if it continues,” he said.
The state minister also argued that the government would have to allocate more subsidies to the sector if the fuel oil prices were cut, which would create pressure on the public.
“For selling fuel at subsidised prices before, the BPC is still buckling under Tk 274.19 billion of government debt,” Bipu said.
“BPC will again turn into a loss-making entity if the fuel prices are cut for a second time. And it will have to import fuel with loans.”
“People cannot enjoy the benefits directly if fuel prices are cut,” the state minister said.