Home Biz World Jet fuel price increase 122 pc in 18-month
Biz World - June 28, 2022

Jet fuel price increase 122 pc in 18-month

Plane fare doubled too

Mahfuja Mukul: Two years ago, the price of jet fuel used in aircraft was only Tk 48 per liter. Now the price of the same fuel fixed by the government is Tk 106 per liter. Thus, the price of jet fuel has increased by about 122 percent in the last 18 months. The airlines are struggling to meet the cost of passenger transport. A year and a half ago, the fare on the route was two and a half thousand or a little more, the fare has gone up to about five thousand. As a result, passengers are burdened with extra fares.
Meanwhile, the price of jet fuel is gradually increasing every month and the air fares on both the domestic and international routes have increased. This is reducing the number of flights and passengers on different routes. If this continues, the country’s airlines are in danger of falling head over heels. Now the fare has almost doubled in 18 months.
The country’s airlines say 40 per cent of plane fares are based on jet fuel. The price of this jet fuel has more than doubled in the last two years. As a result, fares on domestic routes have almost doubled.
If this continues to increase, the cost of air travel will increase further. Negative ideas will be created. At one stage, the airlines will fall head over heels. So, the government should reduce the price of jet fuel even with subsidies.
Bangladesh Petroleum Corporation (BPC) is working to increase and decrease the price of jet fuel. Padma Oil, an affiliate of BPC, does the marketing at the field level. BPC and Padma Oil Company officials said that the price of fuel oil is increasing in the international market. Now the international price of jet fuel is $1.04 per liter. As such, the price of jet fuel in the international market is now Tk 125 to Tk 128 per liter.
The government is selling at Tk 108 per liter with subsidy. As a result, there is no possibility of reducing the price of jet fuel if it does not decrease in the international market. In 2021, the demand for jet fuel was 319,606 metric tons in Bangladesh, which is entirely dependent on imports.
According to the investigation, the price of jet fuel was Tk 63 per liter last January. On February 9, the price was increased by Tk 6 on the pretext of increasing the price in the international market. On March 6, BPC increased the price from Tk 60 per liter to Tk 6. Later on April 6, Bangladesh Petroleum Corporation (BPC) increased the price of jet fuel by Tk 13 to Tk 100 per liter. The last increase was on May 15, Tk 6 more.
The price list of this new petroleum product is given on the website of Bangladesh Petroleum Corporation (BPC). According to the website, the new price list was updated on May 18. According to the price list, the new price list of Jet Fuel has been implemented from May 15. According to the list, jet fuel costs Tk106 per liter for local flights and Tk 109 for international routes.
Plane fares will increase further
As a result of the increase in the price of jet fuel, the airlines of the country are preparing to increase the fare another time. If the fare continues to rise, the number of air travelers is likely to decrease. It will also affect the tourism industry. People will be averse to travel. As a result, the country’s tourism sector will also lag behind.
It is learned that before the Corona epidemic, when the price of jet fuel was Tk 48 per liter, the minimum fare on the Dhaka-Jessore route was Tk 2,600. It has now risen to Tk four thousand six hundred. Similarly, the minimum fare on the Dhaka-Cox’s Bazar route was Tk 3,600, now it is Tk 5,600. The fare from Dhaka-Saidpur has increased from Tk 2,600 to Tk 4,800. The rent in Chittagong, Sylhet and Rajshahi is at least Tk five thousand. Before Corona it was Tk 2,600. Now preparations are underway to increase this rent further.
Biman Bangladesh Airlines Limited, US-Bangla Airlines and NovoAir now carry passengers by air to various destinations in the country. Two more airlines, Fly Dhaka and Air Astra, are preparing for domestic passenger transport. But at a rate at which jet fuel prices are rising, those concerned say it will be difficult for airlines to survive.
US-Bangla Airlines General Manager (Public Relations) Kamrul Islam told that now is the off-season for tourism. The number of passengers on domestic flights is low. In the meantime, if the price of jet fuel increases, it is normal that the fare will increase. Because 40 percent of the cost of operating an aircraft is fuel consumption. Rising rents have a negative impact.
He said that during the Corona, the movement of planes was stopped in all the countries of the world. At that time the tourism sector i.e. hotels and industrial factories were also closed. This has had an impact on the country’s economy. Now if the airlines are affected, other sectors of the country will also be affected. So, the government should reduce the price of jet fuel and reduce VAT in this sector and give more subsidies.
If the price rises in the international market, BPC can raise the price, in this context, Kamrul Islam said, the price of jet fuel has been increased in stages without any reason during the corona. At that time the price of fuel did not increase in the international market. Now, on the pretext of the Russia-Ukraine war, fuel prices have risen in the international market. Even if it grows, the government should find a way to keep this sector alive.

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