Proposal Sent to Decrease Fuel Oil Prices

The price of fuel oil has been increased by almost 50 percent in the country on August 5. The Ministry of Finance was not in favor of increasing the price so much. People's survival has become a liability with the rise in fuel prices. Because the impact of fuel price increase is directly on people's livelihood. The government will reduce the price of fuel by reducing the duty soon.

This information is known from the sources of the Energy & Mineral Resources Division.

It has been reported that the Energy & Mineral Resources Division is reviewing how much duty can be reduced on Bangladesh Petroleum Corporation (BPC) and Petrobangla in order to reduce the price of fuel. The tariff reduction proposal from the energy department will soon be sent to the National Board of Revenue (NBR) through the finance department. The prescribed new prices will be implemented very soon.

It is also known that there is a disagreement between the government bodies regarding the increase in the price of fuel oil. A section feels that it is not right to increase the prices so much at once. The Ministry of Finance itself was not in favor of raising prices at such a high rate. In such a context, there are plans to reduce the price of fuel oil, especially diesel and kerosene. For this reason, the energy department is proceeding with multiple options. Among these are tariff reduction and the global market situation. Because recently the price has come down in the world market. Although the government has not bought cheap oil so far. This downward trend in prices continues and if BPC is able to buy, the price may be reduced without reducing the duty. And if the price of oil does not decrease, the reins can be pulled by reducing the duty.

Income tax and value-added tax or VAT is about 37 percent tax on fuel oil. According to the Energy Division, buyers are currently paying VAT of Rs 16.14 paise out of Rs 114 per liter of diesel. 18 more tax per liter is to be paid for income tax.

The concerned officials say that the government has revenue needs. In all cases, the revenue collection will decrease if concessions are given. In that case, pressure will be created on other expenses of the government. For this reason, if the people are exempted from any of the VAT and income tax, the price of fuel oil will decrease to some extent.

A senior official of the energy division said that the division held a meeting with BPC and Petrobangla on August 3 to reschedule income tax and VAT. In the meeting, it was decided to quickly revise income tax and VAT on diesel, kerosene, petrol, and octane. Although the price has been increased on August 5. However, the work does not stop. The new rates of income tax and VAT have already been fixed initially. A request will be made to the NBR through the Ministry of Finance for the implementation of revised rates soon.

Although in September last year, the energy division had proposed to revise income tax and VAT, the NBR did not accept it. Last year it was proposed to withdraw VAT from trader to consumer level. 13.90 taka per liter of diesel at the consumer level and 2 taka 24 paisa VAT at the merchant level. At that time, the energy department proposed to fix income tax and VAT instead of percentages. Because fuel prices fluctuate all the time. If the price increases, the cost of income tax and VAT increases. It is said that a similar proposal is being made this time as well.

The official said that due to the increase in the dollar exchange rate in the country, more pressure has been created. Although the prices in the international market are falling, the cost of imports is not falling. The government wants to keep foreign exchange reserves at a satisfactory level. That is why reducing the price of fuel or revising the tax and duty rates - everything depends on the decision of the top level of the government.