The government of Bangladesh has officially released “Fuel Pricing Guidelines” via a gazette notification on Friday, aiming to introduce an automated pricing system for petroleum fuels across the nation.
According to the newly established guidelines, prices for various petroleum fuels, encompassing petrol, diesel, octane, kerosene, furnace oil, jet fuel, and marine fuels, will be dynamically determined based on international market rates. This innovative approach ensures that local fuel prices will fluctuate in tandem with global price variations, with the government slated to announce monthly adjustments.
Despite State Minister for Power, Energy, and Mineral Resources Nasrul Hamid’s announcement that the automated pricing would take effect from Friday, it has been delayed pending the prime minister’s approval. Energy Secretary Nurul Alam clarified that the guidelines are awaiting approval, expecting implementation within 10-12 days.
Acknowledging the initial confusion surrounding the automated pricing system, the Energy Secretary affirmed plans to collaborate with the Bangladesh Petroleum Corporation (BPC) to streamline the process and enhance clarity.
The Fuel Pricing Guidelines provide an illustrative example of their application, suggesting that if implemented from April 1, the average international fuel prices from February 21 to March 20 will be considered for determining April’s rates.
Addressing concerns about potential contradictions in the guideline, the Energy Secretary attributed the confusion to the novelty of the automated pricing system in Bangladesh. Plans are underway to collaborate with BPC to ensure a clear understanding and effective implementation.
To determine the pricing for petroleum fuels, the guidelines outline a comprehensive process considering factors such as international market prices, import tax, advance income tax, value-added tax (VAT), operational expenses, finance, administrative and maintenance costs, BPC margins, and sale and distribution costs.
A source within the Energy Division revealed an anticipated outcome of the automated system, suggesting that octane prices may fall below diesel prices, posing a noteworthy concern for the government. Efforts are underway to address this concern and maintain the government’s desired pricing structure.
