Highest ever diesel price hike in a decade

The latest spell of diesel price hike is the highest ever in the country since 2008.

The 23% hike is more than twice the last major adjustment in 2013 when diesel price was increased 11.47% as refined fuel (diesel) price crossed $100 per barrel in the international market.

In the last decade, the price of diesel in the country saw minor increases of Tk2, Tk3, Tk4 and the highest of Tk7 per litre.

On 3 November this year, the Energy and Mineral Resources Division increased diesel price by 23.08% to Tk15 per litre, adjusting to global energy prices.

Some experts and officials, wishing anonymity, said they believe that the hike could have been avoided if the tax on fuel was reduced.

Md Anisur Rahman, senior secretary at the Energy and Mineral Division, however, said a tax reduction was not requested as this would decrease the government's revenue and impact ongoing development projects.

He also told The Business Standard that this was not the highest ever diesel price adjustment in the country.

"In July 2007, diesel price was hiked by 37.5% to Tk55 per litre from Tk40," he said.

Sources at the Bangladesh Petroleum Corporation (BPC), the state-owned lone fuel importer and distributor, said the government collects around 30% of the fuel revenue under different taxation structures.

In the fiscal 2020-21, the National Board of Revenue got Tk9,000 crore from fuel sales.

Meanwhile, consumer rights activists are worried about the toll the hike would take on citizens' daily expenses.

Professor Shamsul Alam, energy adviser at the Consumers Association of Bangladesh (CAB), said, "There is no logic behind this fuel price hike at a time when the situation is totally different. No countries' fuel price can be compared to our increase in price."

During the pandemic, the government should think about citizens' comfort, he said.

In May 2011, per litre diesel price was raised to Tk46 from Tk 44.

The same year, price was again adjusted thrice by Tk5 in September, November and December.

In January 2013, fuel price was hiked again by Tk7, but reduced by Tk3 in 2016 when the price per litre was set at Tk65.

On 3 November, the price was hiked to Tk80, following an increase by Tk15 per litre.