The government reduced the price of furnace oil, used mainly to generate electricity, by Tk18 per litre, effective from yesterday midnight.
A gazette notification announcing the price cut – from Tk60 to Tk42 – was issued by the Power, Energy and Mineral Resources Ministry.
According to the Power Development Board, furnace oil is used to produce 21.56% or 2,508MW of the total power; 7.97% or 927MW is generated using diesel and 61.62% or 7,169MW comes from gas.
“At present, generating each unit at furnace oil-based plant is Tk 13-14. With the price cut, the PDB will be able to save Tk200 crore on an average as production cost will come down to Tk 11-12 per unit,” PDB Member (generation) Khaled Mahmood told the Dhaka Tribune.
State Minister for Power Nasrul Hamid had said there was no decision yet to reduce prices of petrol, diesel, octane and other fuel oils.
State-run Bangladesh Petroleum Corporation (BPC) imports oil from 13 international companies. At present, BPC imports around 1.2 million tonnes of crude oil and 4.2 million tonnes of refined oil, while around 300,000 tonnes of petroleum products come from different gas fields and private fractionation plants.
Crude oil is processed only at Eastern Refinery Limited to produce diesel, petrol, octane, furnace oil and liquefied petroleum gas.
The BPC fixed octane price at Tk99, petrol at Tk96, diesel at Tk68 and furnace oil at Tk60 per litre in 2013 when oil prices shot to $122 per barrel in the international market.
But it has not revised the prices although global oil slump saw crude drop below $40 a barrel in the last two years.
A BPC official said the government makes Tk27, Tk26, Tk34 and Tk37 on an average by selling each litre of diesel and furnace oil, kerosene and jet fuel, petrol and octane respectively.
The last time the price of oil was lowered was in 2008.