CPD urges govt to withdraw hike in diesel, kerosene prices

The Centre for Policy Dialogue today recommended that the government should reinstate the earlier prices of diesel and kerosene immediately to help the country recover from the pandemic induced economic downfall.

"In view of recovery from the adverse impacts of Covid-19, stability of fuel price is critically important given the 'strategic' nature of the commodity," the think-tank said in a media briefing on "Fuel price hike: how necessary was it?".

In a period between fiscal year 2014-15 to 2020-21, Bangladesh Petroleum Corporation (BPC) made a profit of nearly Tk 43,138 crore and the state-run organisation said it incurred a loss of over Tk 1,100 crore in the last five months.

The CPD said the accumulated profits of BPC should be enough to provide some cushion despite the previously accrued losses and the government can keep the prices at their previous levels through subsidies or tax and tariff cuts.

Forecasts by multilateral agencies (e.g., World Bank) predicted a downward movement of fuel prices in 2022.

Absorbing the price shock and focusing on recovery should be the government's prime concern at this point of time and the government should ensure the enforcement of its measures so that the common people do not fall prey to the whims of bus, launch or transport owners, suggested the CPD.

The centre also stressed the need for improvement in BPC's accountability and transparency and cutting corruption of fuel marketing companies.

Consultation with all stakeholders should be part of the price setting mechanism instead of arbitrary price setting practices, it recommended.

The government does not lower fuel prices when there is a fall in the global market but it becomes costlier when there is a rise in international rates, it said.

Fuel prices hit its lowest of $23.3 per barrel in April 2020 following the Covid-19 outbreak, the CPD said.

But fuel prices were not adjusted in the domestic market that time following the international rate, said Fahmida Khatun, executive director of the CPD.