An official handout issued late Sunday announced the single biggest increase of fuel prices since the country's independence in 1971 saying the interim government had no other alternative amidst record-breaking global oil prices that were bleeding the Bangladesh Petroleum Corporation white.
The price of most used oils, diesel and kerosene, increased to Taka 55 per litre (1 Taka = $0.015) from Taka 40 while octane was revised upward to Taka 90 from Taka 67 and petrol Taka 87 from Taka 65.
The price of furnace oil has gone up to Taka 30 from Taka 20 per litre and a cylinder of liquefied petroleum gas (LPG) will now cost Taka 1000 instead of Taka 600, said officials of the Energy Division.
"We were helpless," an official from the Ministry of Energy told newspersons after the official announcement. The latest hike is feared to shoot up transport and agriculture costs after the rising food prices had exposed the 18-month old caretaker government to its worst crisis.
The hike came for the second time since an increase in April last year when the price was raised from 13 to 21 per cent while senior government leaders, including Finance Adviser Mirza Azizul Islam hinted on several occasions in recent months that oil price hike was just a matter of time.
"We would have to spend Taka 17,000 crore in subsidies if we did not adjust the petroleum prices for the new fiscal," as the price of a barrel of crude oil was $60 last year, while it went up to $143 on Sunday, Tamim said.
The government, he said, would still have to spend Taka 10,000 crore in oil subsidies despite the latest price hike in the prices of petroleum products. Economists and financial analysts said the hike was harsh but inevitable.
The economy had to be kept in rack but suggested subsidy to cushion shocks upon the poor.
