Bangladesh cuts public fuel cost amid oil price hike

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(Xinhua)
Updated: 2008-09-01 14:27

DHAKA, Bangladesh -- The Bangladesh government Sunday cut fuel bill of its ministries and divisions by ten percent in the wake of ballooning cost of the country's oil import, leading English newspaper The Financial Express reported Monday.

The finance ministry announced the decision in a notification, which also made it mandatory to convert newly procured oil-run cars into gas-run ones as gas price is lower in the country.

The finance ministry said the move would increase energy efficiency and was part of austerity measures that would keep public expenses under tight leash.

Officials said the order would help save the government at least 3.50 billion taka (about $50 million) from the government's annual fuel expenditure that hit 35.00 billion taka ( about $500 million) in the 2007-08 fiscal (July 2007- June 2008).

The government said it would not allow the ministries or its divisions and state-owned enterprises to use newly bought cars without converting them into Compressed Natural Gas (CNG)-fired ones.

Natural gas is widely used in Bangladesh as the country has natural gas reserve, though its gas supply is short of demand.

"Without CNG run facility no new cars would be allowed to ply," said the notification.

The country spent more than 3.0 billion to import 3.5 million tons of crude and refined oil last year, a year-on-year increase of around one billion dollars despite the consumption was fractionally lower than the previous year.

State-owned oil importer, Bangladesh Petroleum Corporation (BPC) said in spite of the recent fall, import cost still remained at least 20-30 percent higher than the government administered prices of petroleum products in the domestic market.