Oil price indecision
reducing price of
furnace oil will not be enough and the government has to positively lower the price of diesel, petrol and octane as well
It is not wholly satisfactory to know that the government has decided to reduce the price of furnace oil, because it has yet to take any decision to reduce price of diesel, petrol and octane. According to reports, the reduction of price in the case of furnace oil would be not more than Tk 15 per litre. The state minister for power, energy and mineral resources, Nasrul Hamid, said that in order to help the industrial sector, the decision to reduce the price of furnace oil was taken.
True, a good number of factories and power plants use furnace oil, but if the price of diesel, petrol and octane is not reduced, it would mean very little in terms of helping the sector. Transportation of goods, raw materials or produced items, is very crucial factor in the business and if the price of diesel, petrol and octane is not adequately decreased, industries and businesses will not get the required thrust necessary to increase the domestic growth.
The price of oil has not come down to its present $30 per barrel from $122 within the last two years at a time. It fell gradually. Since the trend of falling in the price started we in this column time and again pointed out that oil price should be reduced proportionately with its decrease in the international market.
The reduction in price was indeed taken by many countries, including India and Pakistan, as an opportunity to increase their growth but the government in Bangladesh was rather unwisely sticking to its decision not to lower the price on the pretext that the Bangladesh Petroleum Corporation (BPC) so far gave huge subsidy when the oil price was very high in the international market.
But the fact of the matter is whenever in the past oil price shot up in the international market, proportionately in the domestic market also the price was increased. Now when the price has come down to its present level, maintaining the previous price of oil in the domestic market is not only unreasonable, it is also an economically unintelligent decision.
Therefore, reducing price of furnace oil will not be enough and the government has to positively lower the price of diesel, petrol and octane as well. And the government has to indeed create a mechanism through which it will adjust the price of oil following the trend of itincreasing or decreasing trendin the international market.
The government needed to lower oil price long before, but when it indeed has taken a decision it is a half hearted one that would hardly help our economy.
