State Minister for Power, Energy and Mineral Resources Anindya Islam Amit has said fuel prices had to be adjusted to prevent smuggling to neighbouring countries and contain the government’s subsidy burden.

“Fuels are purchased with foreign currency. But due to low prices in neighbouring countries, they were being smuggled. So it was very crucial to increase the fuel price,” he said.

The state minister made the remarks at a press conference at the Secretariat on Monday.

He said the international price of fuel had increased sharply due to the ongoing Middle East conflict, forcing the government to provide substantial subsidies to keep domestic prices lower.

“Such subsidy should be contained to continue the government’s social protection programmes,” he said.

Referring to fuel prices in neighbouring and other countries, Amit said the price of diesel per litre, converted into Bangladesh taka, is 134.76 taka in Kolkata, 164.83 taka in Myanmar, 161.24 taka in Nepal, 179.42 taka in Sri Lanka, 151.22 taka in Thailand, 137 taka in Vietnam, 140 taka in the Maldives, 168.53 taka in the Philippines, 185.48 taka in Pakistan and 144.79 taka in Dubai, United Arab Emirates.

He said diesel would have cost 205 taka per litre if the automatic pricing mechanism had been fully implemented in line with international market prices.

However, considering the financial burden on consumers, the public transport sector and farmers dependent on irrigation, the government kept the price considerably lower by providing substantial subsidies, he said.

“Under such circumstances, the adjustment had become necessary to prevent smuggling and ensure the continuation of the government’s social protection programmes,” Amit said.

On the ongoing international and Middle East crisis, he said 70% of Bangladesh’s imported fuel and 20% of global energy supplies pass through the Strait of Hormuz.

“The current Middle East crisis has created an unprecedented situation, which is different and more complex than the Covid-19 pandemic or the Russia-Ukraine war,” he said.

Regarding the financial position of Bangladesh Petroleum Corporation (BPC), Amit said the state-run corporation had managed to keep fuel prices unchanged so far despite incurring losses of 22,875 crore taka, using additional funds accumulated in previous years.

He said international fuel prices fluctuate continuously, but the government had tried to protect consumers by avoiding immediate price adjustments.

Addressing the impact of the latest adjustment, Amit said, “As a political worker, I understand the suffering that the people will face because of this decision. As there was no alternative ahead, this difficult decision had to be taken. For this, I sincerely apologise to the people.”

He said the government, together with the ministries of Road Transport and Bridges and Shipping, was working to prevent unscrupulous groups from exploiting the situation by charging excessive transport fares or creating artificial shortages.

Market monitoring has also been strengthened to minimise the impact on consumers, he said.

Regarding the International Monetary Fund (IMF) loan and its conditions, Amit said the loan had not been taken by the current democratic government but had been obtained previously.

“If there is an obligation to comply with the loan conditions, the matter will be examined and necessary measures will be taken,” he said.

The government on Sunday night adjusted retail fuel prices for September in line with international market prices.

Under the new rates, diesel has been fixed at 135 taka per litre, octane at 165 taka, petrol at 160 taka and kerosene at 155 taka.