Fuel costs climb again

Bangladesh has increased retail fuel prices for the second time in six weeks, raising the cost of petrol and kerosene by 5 taka per litre.

The hike, effective from Monday, sets petrol at 140 taka ($1.15) per litre and kerosene at 135 taka per litre, while diesel — the country’s most widely used fuel — remains unchanged at 115 taka per litre.

The Energy Ministry said the revised rates were determined in line with changes in international petroleum prices.

Bangladesh introduced an automatic fuel pricing mechanism in 2024, under which domestic fuel prices are periodically adjusted based on international fuel costs, exchange rate movements, and import expenses.

The latest increase follows a similar hike in April, after the war in Iran pushed up global oil prices and raised import costs for the South Asian nation.

Analysts warn that higher fuel prices are likely to feed into transport and food costs, adding to inflationary pressures already affecting consumers.

State Minister for Power, Energy and Mineral Resources Anindya Islam Amit said the government was compelled to raise fuel prices due to “unavoidable circumstances” amid the ongoing Middle East crisis.

Speaking to reporters at his office in the Secretariat on Monday (1 June), he added that domestic prices would be reduced promptly should international rates decline.

“Last night, the government increased the prices of octane, petrol and kerosene by Tk5 per litre, while keeping diesel prices unchanged,” the state minister said.

“We have repeatedly stressed that such unpopular decisions are taken only when there is no alternative. The current situation has arisen because of the crisis in the Middle East.”

Noting that diesel accounts for 66 per cent of the country’s total fuel consumption and requires the highest level of government subsidy, Amit explained that the government deliberately left diesel prices unchanged to protect ordinary consumers.

“However, as I mentioned, we are left with no alternative. In such circumstances, we are compelled to make adjustments in certain areas,” he said.

The state minister expressed optimism that the Middle East situation would be resolved soon. “I can say with confidence that if global prices decline sharply, we will make every effort to adjust domestic prices accordingly and without delay,” he added.