BPC raises furnace oil price by 14.86pc

It now costs Tk 85 a litre

| Updated:
August 17, 2022 16:38:30

Bangladesh Petroleum Corporation (BPC) has again raised the price of furnace oil in domestic market within four months of the previous hike.

The BPC has increased the price of furnace oil by 14.86 per cent to Tk 85 per litre from the previous Tk 74 per litre – with effect from Monday – which is likely to escalate further the already-rising prices of essentials.

The state-run oil corporation previously increased the domestic price of furnace oil by 19.35 per cent to Tk 74 per litre on March 25, 2022 and by 16.98 per cent to Tk 62 per litre on Nov 5, 2021.

The price of furnace oil was hiked to avert loss and foot import cost of the fuel from international market, said a senior BPC official.

The Consumers Association of Bangladesh (CAB) accused the BPC for raising the furnace oil price again, violating the regulations concerned.

The BPC’s decision to raise the price of furnace oil followed the steepest price hike of diesel, kerosene, octane and petrol by up to 51.68 per cent on August 5.

The government, through an executive order, raised diesel and kerosene prices by 42.5 per cent to Tk 114 per litre from the previous Tk 80 per litre from August 6.

It also raised octane price by 51.68 per cent to Tk 135 per litre from the previous Tk 89 per litre, and petrol price by 51.16 per cent to Tk 130 per litre from Tk 86 per litre.

The price hike of petroleum products fuelled up the costs of transportations, which pushed up the prices of almost all commodities significantly, consumers alleged.

It also sparked agitation from commoners and protests from businessmen, as all were demanding to lower the oil prices.

“It is unfortunate that the BPC is continuously violating the regulations by raising itself the prices of oil products,” CAB Energy Adviser Professor Shamsul Alam told the FE on Tuesday.

The Bangladesh Energy Regulatory Commission (BERC) is supposed to fix the prices of all sorts of petroleum products after arranging public hearings of stakeholders.

“The BPC, which is doing business of oil products, is confiscating public money by raising the oil prices itself over and over again. It must be brought to book,” he added.

“Production costs of the industries that use furnace oil in absence of natural gas will increase further as a consequence (of the fuel price hike),” Mostofa Azad Chowdhury Babu, senior vice president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), told the FE.

A section of unscrupulous businessmen are hiking the prices of their commodities several folds and reaping the benefit of high oil prices, he alleged.

Electricity generation costs of furnace oil-fired power plants would increase further subsequently, said Md Shamim Hasan, director, public relations of the state-run Bangladesh Power Development Board (BPDB).

Furnace oil is mostly used in power plants in the country, most of which is consumed by privately-owned power plants.

Sources said Bangladesh annually imports around 3.50 million tonnes of furnace oil with 3.5 per cent sulphur, of which 3.20 million tonnes are imported by the private sector to run their power plants, and the remaining 300,000 tonnes by the BPC.

The country currently has furnace oil-fired power plants with around 5,700 megawatts (MW) capacity, of which 4,500 MW plants are owned by the private sector and the remaining 1,200 MW are state-owned.

The private sector plants get 9.0 per cent service charge as incentive to import the fuel by their own.

The BPC gets around 400,000 tonnes of furnace oil from its lone crude oil refinery – Eastern Refinery Ltd (ERL) – to meet local demand.

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