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Dhaka Monday,  Jun 27, 2022

Oil Prices to Drop in Bangladesh

The government will lower fuel prices after months of resisting downward revision despite the freefall of global oil prices.
The prices of fuel oil in the domestic market would be re-fixed in September by adjusting them with the international prices, Finance Minister AMA Muhith said on Sunday.

The steady fall in the international market for over a year has made it clear that oil prices in Bangladesh will drop after adjustment.

After meeting IMF Executive Director Rakesh Mohan at his office, Muhith told reporters: “Oil prices have fallen significantly in the international market. We’ll have to revise them as well.”

He said the Energy and Mineral Resources Division was asked to make a report analysing data on the issue.

“The oil prices will be re-fixed after the report is submitted,” Muhith said.

Asked when the prices will be revised, he said, “It will be done before the prime minister (Sheikh Hasina) and I go to the US on Sept 23 to join the General Assembly of the United Nations.”

A Wall Street Journal report last Friday said the price of crude oil dropped to $40 a barrel, lowest since March 2009.

West Texas Intermediate prices for October delivery dropped to $39.86 per barrel on the New York Mercantile Exchange on Friday, the report said.

The oil prices also fell in Europe. On Friday, a barrel of oil was sold at $45.46.

The government did not lower the prices despite the fall in the international market.

The finance minister defended the decision not to lower the oil prices, saying Bangladesh Petroleum Corporation (BPC) needed to recover the losses it had sustained on account of subsidy.

On Sunday, he said, “The oil prices were not reduced in view of the losses BPC has been sustaining.”

BPC Chairman AM Badrudduja told that the corporation had been enjoying profit since December by selling all petroleum products.

Cabinet nod for pay scale in September

Muhith said the proposed eighth pay scale of government employees would get the Cabinet nod in September.

“The proposed pay scale is with the Prime Minister’s Office now. It will be placed in the Cabinet before we go to the US,” he said.

A secretary-level committee submitted its updated report to the minister on the government’s eighth pay revision on May 13.

The report, which revised the Bangladesh Pay and Services Commission’s recommendations, suggested a maximum basic pay of Tk 75,000 and a minimum of Tk 8,250.

Although its structure is not yet finalised, the government will introduce the eighth pay scale with retroactive effect from July 1.

The Pay Commission, headed by former Bangladesh Bank governor Mohammed Farashuddin, had made its recommendations on Dec 21 last year.

It had proposed 16 grades, but the secretary-level committee has revised it to 20.

Muhith estimates a 63.7 per cent hike in government salary expenditure to match the new pay structure.

IMF fund issue settled

Muhith said he discussed the clearance of the remaining two instalments of the extended credit facility (ECF) from the IMF with its Executive Director Mohan.

He said the discussion helped clarify the conditions – enactment of new VAT law and BPC audit by an international firm – the IMF had set,

“We’ll get the first of the remaining two instalments by the last week of September. The organisation will also clear the last instalment later,” Muhith said.

He said the IMF wanted to give Bangladesh $1 billion in new loans.

The decision would be finalised in the IMF’s annual meeting in Peru in October, he added.

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