Energy Bangla

Energy electricity and environment news portal

Dhaka Saturday,  Mar 25, 2023

Oil Price Cut: Mass People Won’t Get The Benefits

Rafiqul Bashar

Fuel price is decreased finally but the mass people won’t be able to get the benefits of this nominal price cut. Majority of the people of this country are low income and are the implicit beneficiaries of fuel price. Besides, Bangladesh doesn’t have the right managerial infrastructure to extend the advantages of price cut to the doorsteps of those people.

The prices of diesel and kerosene have been brought down only by Tk 3 a litre, which is comparatively much lower than the price cut of other two types of fuel. Consumers are not likely to be benefited much by this 3 TK rebate.

The price of fuels has been decreasing globally for the past a few years. The price started falling from 128 USD to a record lowest 28 USD or even less per barrel in the international markets. Government adjusted the local price by increasing it according to the global market, while the price was at a hike. But, until now the price was never lowered during the past two years while the global oil market was facing a great depression due to the continuous price fall. However, the government has brought down the price nominally at a moment when the international market has started to rebound slowly.

Government was under pressure to lower the price since the global price fall. Specialists even including Bangladesh Bank recommended several times to lessen the fuel price during the past times. They said that, the growth rate would accelerate if the fuel cost is decreased. Now it’s interesting to see if the government can attain the assumed growth rate by this nominal price cut.

According to the specialists, it would be tough for the govt. to achieve the targeted growth rate. At one hand, no one can assure that the govt. will be able to accelerate the growth rate and at the other hand, most of the people of this country is not going to be benefited directly at any means. It can only be considered as a tricky and successful step in the street of politics but nothing more than this. Though this price cut paved a way of profit making for some unproductive private sectors specially transport business. Unfortunately, the people oriented with transport businesses who are among the beneficiaries of this price cut are just a microscopic fraction of the society.

The prices of diesel and kerosene have been brought down only by 4.41 percent. Consumers of these two fuels are mostly the people from relatively lower economic class where, Petrol and Octane users are possess to a relatively higher economic class. Interestingly, govt. brought down the price of Octane and Petrol by more than 10 percent, giving extra privileges to the privileged.

Diesel has the highest usage among all the imported oils followed by Kerosene and Octane. Irrigation pumps, tube wells in rural areas mostly depends on diesel powered engine. Govt. has been subsidizing those sectors already. Again, most of the public transports are also Diesel driven and the users are of those transports are poor and middle class. According to the communication minister, bus fare would be reduced by hardly 3 paisa per kilometer after this price cut. There is a reasonable doubt that, if it would barely help any passenger. Govt. has been claiming that the transport fare may go out of control if they lower the fuel price at a higher rate. Depending on this pretext the govt. finally cut the price at such a flamboyant rate.

However, the govt. has a plan to reduce the prices of fuels at three steps and this is the first step. Meanwhile, the price of fuels just began to incline slightly in the international market. In a situation like this people are deeply concerned about the subsequent steps of lowering the price of fuels.

Even after this recent price cut, currently govt. is counting profit of about Tk 17 per litre by selling Diesel and Kerosene and Tk 25 and 20 by selling Octane and Petrol respectively.

Considering all these facts, the price cut can only be considered as just releasing the formality from the govt.’s perspective. Questions may arise on how philanthropic step it was. However, one may still give thanks for whatever he/she have got.

Comment here