Jet fuel prices have shot up again in Bangladesh to reach Tk130 after Padma Oil Company, a subsidiary of Bangladesh Petroleum Corporation (BPC), raised it by Tk5 a litre.
The move came at a time when the international price of jet fuel dropped to $1 from $1.09 per litre.
Jet fuel prices are reviewed every month, based on the average price of the international benchmark, especially the Indian (Kolkata) jet fuel market, said BPC officials.
The new price list for jet fuel came into effect on Wednesday.
Aviation experts were wary about the price hike at a time when the sector was going through difficult times, especially when they were yet to recover from the damage caused by the impact of Covid-19 pandemic.
They also said jet fuel prices are increasing every month.
As a result, the operational costs of airlines and helicopters have also increased.
BPC follows two formats to hike price
Talking to Dhaka Tribune, Khalid Ahmed, director (operations and planning) and also additional secretary at BPC, said they have followed two formulas to fix jet fuel price at domestic and international level.
Jet fuel prices for domestic airlines were always reviewed based on eight neighbouring countries' airports in the jet fuel market. , said the BPC official.
Replying to a query about price hikes, he said that the final rate was determined by the relevant ministry by adding value added tax (VAT) and taxes, taking into account the lowest rate declared by the airports of those countries.
On the other hand, price for international airways was fixed after reviewing the London-based Jet Fuel Price Monitor -- Platts, Ahmed added.
However, domestic operators warned that the new increase in the price of jet fuel will make it difficult for the country's airline industry to survive in the international competition.
The cost of air travel for passengers will increase, they also feared.
Kamrul Islam, general manager of public relations at US-Bangla Airlines, told Dhaka Tribune: "Although BPC reduced the price of jet fuel for international airways, it has continued to rise in the domestic market without showing any proper logic and explanation."
If the government fails to control jet fuel prices, domestic airlines will suffer financially and lose their position in the aviation market, he added.