• Thursday, Oct 29, 2020
  • Last Update : 11:45 pm

Muhith: Electricity price depends on fuel prices

  • Published at 04:24 pm November 17th, 2016
  • Last updated at 10:31 pm November 17th, 2016
Muhith: Electricity price depends on fuel prices

He told journalists on Thursday the price of electricity will depend on how much fuel prices are reduced. The finance minister was coming out of a meeting with an International Monetary Fund (IMF) team at the ministry auditorium.

Muhith said he would raise the issue of reducing electricity prices during an upcoming meeting on performance of budget implementation in first quarter with Prime Minister Sheikh Hasina.

“The government has decided to reduce fuel prices in local consumer market, and the cutting of electricity prices will depend on how much fuel prices are reduced,” the finance minister said.

“If fuel prices are lowered in consumer market, the country's current economic dynamism will be further boosted,” he added.

About power prices, Muhith said a proposal will be submitted to the Ministry of Energy and Power and placed in the next Parliament session in December after acquiring the consent of the prime minister.

“Then, the final decision on power prices will be made.”

He said most of the country's electricity comes from expensive sources like fuel oil-fired and coal-based plants, not from less costly hydroelectric plants.

He said some members of Fiscal Coordination Council at a recent meeting also recommended reducing fuel prices.

Muhith said fuel price cuts will have a positive impact on price levels on consumer goods and services, which will help the economy.

“Everyone will get benefits of oil price cuts as prices of consumer goods and services like transport will come down.”

Muhith said the IMF praised the performance of the country's economy. “However, there are several challenges for the economy, but they can be handled successfully.”

He said increasing investment in the country remains a big challenge.

“But this is good that foreign direct investment has increased recently.”

The government reduced fuel prices last year - octane and petrol by Tk10 per litre and diesel and kerosene by Tk3 per litre.

As a result, the price per litre of diesel became Tk65, kerosene Tk65, octane Tk89 and petrol Tk86.

In September 2015, the government increased an average retail power tariff by 2.93% to Tk6.33 a unit from Tk6.15.

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