Prime Minister Sheikh Hasina has directed the Ministry of Power, Energy and Mineral Resources, and the Bangladesh Petroleum Corporation (BPC) to spell out the reasons behind the fuel price hike to the people of the country.
"The ministry and the BPC have already explained their stance to the people earlier and to the Cabinet during today's meeting with the premier in the chair…The prime minister directed them to explain it again to the people," Cabinet Secretary Khandker Anwarul Islam told reporters after the Cabinet meeting on Thursday.
Asked about any possibility of a decrease in fuel prices, he said the ministry will clear everything through a press conference.
On 5 August, the government increased fuel oil prices 42.5% to 51.6%, the highest in 20 years, dealing a big blow to people already overwhelmed by skyrocketing prices of essential goods amid record inflation.
The Energy and Mineral Resources Division hiked diesel and kerosene prices by Tk34 per litre to Tk114 and octane and petrol prices by Tk46 per litre to Tk135 and Tk130, respectively.
The announcement drew severe criticism from the people and various political parties.
After the Cabinet meeting, Commerce Minister Tipu Munshi told reporters, "The state minister for energy presented the import cost and various other costs including value-added tax (VAT) at the meeting. He also mentioned how much income will be generated if fuel oil is sold at the new rates. Besides, he presented the comparative current prices of fuel oil in Bangladesh and other countries, which showed prices here are lower than in neighbouring countries."
The price of fuel has been set in coordination with neighbouring countries. Even after the hike, the government is counting a Tk8 loss per litre of diesel, he said.
Regarding the increase in the prices of essentials due to the fuel price hike, the commerce minister said, "The road transport and bridges ministry sets the transport fare. Discussions are underway to find precise information on how much the transport cost per kilometre will rise due to the fuel price hike."
Meanwhile, officials of the Energy and Mineral Resources Division told The Business Standard that the Division has directed the BPC and Petrobangla to prepare a proposal to reduce the existing VAT along with the import duty on fuel oil and liquified natural gas (LNG) to a reasonable rate.
After receiving proposals from these two organisations, the energy division will write to the Ministry of Finance to reduce the VAT, the officials said.
Before increasing the price of diesel and kerosene in November last year, the energy division also wrote to the National Board of Revenue (NBR) to reduce the VAT even as the price of fuel oil rose in the international market.
BPC Chairman ABM Azad said on Wednesday that it is a matter for the NBR to decide on reducing the VAT on fuel oil.
But last week, NBR Chairman Abu Hena Md Rahmatul Muneem told reporters that reducing the VAT on fuel oil is a policy decision of the government.
The Cabinet on Thursday also approved in principle, the draft of The Drugs Act 2022, with tougher punishments, to prevent malpractice by producing, storing and selling counterfeit or adulterated medicines, Khandker Anwarul Islam said.
According to the draft law, a person will be jailed for 10 years with a Tk10 lakh maximum fine if found guilty of producing, storing and selling counterfeit or adulterated medicines as well as selling stolen government drugs, said the cabinet secretary.
The jail period and fine were 3 years and Tk2 lakh respectively in the previous ordinance.
The Directorate General of Drug Administration (DGDA) has been instructed to remain vigilant in this regard. Courts will be set up in each district to try cases against unscrupulous traders, he said.
The Cabinet passed the State Acquisition and Tenancy (Amendment) Act 2022, with a view to bringing a minor change in the existing law to reduce pending cases.
Tribunals will be set up in each district where assistant judges or senior assistant judges will be given the authority to try cases, while district judges will act as the appeal authority until a formal tribunal is formed as per the draft law, Anwarul Islam said.
The Cabinet approved the draft of the National Industry Policy 2022, to accelerate the economic progress of Bangladesh through industrialisation with the balanced use of local raw materials and resources, alongside cashing in on the 4th industrial revolution, he said.
The meeting also cleared the proposal for ratification of two agreements to be signed with Saudi Arabia and Serbia, the cabinet secretary said.
The deeds are the agreement between Bangladesh and Saudi Arabia on cooperation and mutual assistance in customs matters, and the agreement between Bangladesh and Serbia concerning visa exemption for diplomatic and official passport holders, he added.