Bangladesh backtracks on plan to cut oil product prices

[DHAKA] Bangladesh has backtracked on its plan to slash prices for gasoline, diesel fuel and other oil products amid a rise in global crude oil markets, the country's junior minister for power and energy said on Wednesday.

The government earlier said it would cut oil product prices in phases after cutting rates by up to 10 per cent in April. "Right now, the government has no plan to cut oil in view of its global uptrend," Nasrul Hamid, junior minister for power, energy and mineral resources, told reporters after a deal was signed with French company Technip for designing a new oil refinery unit with a capacity of 3 million tonnes a year.

After the reduction last year, a litre of gasoline costs 86 taka (S$1.54) and 95-octane gasoline is 89 taka while a litre of diesel and kerosene cost 65 taka.

Global oil prices started tumbling in 2014 on a persistent supply glut to below US$30 a barrel in early 2016. They have rebounded since then to about US$55 a barrel on signs the glut may be easing. However, they remain below the record highs of 2008.

Bangladesh last raised oil prices in 2013 when the price of oil jumped to US$122 a barrel. However, the government kept prices unchanged over the last two years to help state-owned Bangladesh Petroleum Corp offset its previous losses.

Bangladesh's demand for oil is growing sharply because a shortfall of natural gas means it has relied on costly oil-fired power plants to resolve its crippling electricity shortages.

Bangladesh imports 600,000 tonnes of Murban crude from Abu Dhabi National Oil Co and another 600,000 tonnes of Arab Light from Saudi Aramco annually for its sole refinery.

The south Asian country also imports around 3.5 million tonnes of refined oil products through tenders and term deals.

Reuters