Price hike of POL products
Sunday, 08 June 2008

The price hike of POL products, a burning issue for both the developed and developing countries alike was raised at a press briefing by CPD Wednesday when light was also thrown on adjustment of petrol and octane prices in phases , in line with international market to reduce the pressure on government budget for next fiscal, against allocation for fuel subsidies. CPD is against rise in price of kerosene and diesel which are widely used by poorer section and irrigation purpose. The government is to take into account oil price movement in the international market, crop and productive sectors, purchasing power of the population and equity before adjustment of fuel price. The government had given Tk 7,523 crore subsidy to the Petroleum Corporation. Taking it into account the total budget deficit was estimated at nearly 6 percent of total GDP. If the government does decide to withdraw subsidies from the prices of petrol and octane, in the budget for the fiscal year 2008-2009 , the consequent rise in transportation costs will further drive up the prices of essential items including food. Though CPD has not suggested withdrawal of subsidies from diesel and kerosene, rise in petrol prices will affect agricultural production, with the rise in price of chemical fertilizer and transportation costs of other inputs .The exploration and mining of coal for power generation have to be prioritized . The negative impact of fuel price rises should be avoided now , and fuel subsidies allocation retained in the next budget along with adequate investment in expansion of gas and coal utilization for power generation and running of factories and vehicles .

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