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The government is likely to pay higher premium on import of refined petroleum products by US$ 0.46 on an average a barrel that will cost the country an additional Tk 310 million during January-June period.
The premium on diesel, the country's consumption of which accounts for more than 60 per cent, will increase by $ 0.65. The existing premium of diesel is $ 4.20, sources said.
The new premium on kerosene and jet fuel will be $ 5.50 instead of existing $ 4.8 while the readjusted premium on octane will be $ 7.3 in place of $6.40.
Bangladesh does not import petrol but refines crude oil in its plant in Chittagong, they added.
The cabinet committee on purchase is likely to readjust the premium at its meeting today (Wednesday) against the backdrop of growing pressure from the oil exporting countries, especially Kuwait.
Premium -- freight charge and exporters' profit margin -- adds with price of petroleum products to determine the international price of per barrel of fuel.
Bangladesh, as per condition with different oil exporting countries, has to review the premium every six months. The latest increase in premium will be valid for January-June period of the current calendar year.
A Bangladesh Petroleum Corporation (BPC) official said the state-owned organisation has to spend an additional Tk 310 million to import some 1.8 million tonnes of fuel oil for the period.
This will put further pressure on the government in terms of providing subsidy on oil to consumers after a recent bid to increase petroleum prices in the local market to reduce BPC losses has been made ineffective.
High-ups of the government refrained from increasing oil prices ahead of next general election though energy ministry had initiated a move and finance division supported it.
Due to price hike of petroleum products globally since last year, the country's import bills on fuel may cross $ 2.0 billion in the current calendar year.
The amount is almost double than the import bills of 2004.
The government readjusted prices of petroleum products in the local market at least three times in the last year. Despite increase in petroleum prices, the BPC incurred losses to the tune of Tk 20 to Tk 25 million in 2005.
The BPC, which contributes nearly Tk 3.5 billion to government's revenue basket as import duty each year, has become so vulnerable that it faced problems in opening letters of credit (LCs) recently for oil import.
By the help of Finance and Planning Minister Saifur Rahman, BPC overcame the problem and managed to open LCs worth nearly $ 300 million to import oil for two months a couple of days ago.
Rahman asked the central bank to release foreign currency from its own coffer, helping the nationalised commercials banks to open LCs in favour of BPC's oil import.
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