MD NAZRUL ISLAM and MAHMUDUL HASAN

The far-reaching implications of an ongoing rally in oil prices amid Russia’s invasion of Ukraine have already descended on Bangladesh as the state-owned Bangladesh Petroleum Corporation (BPC) is losing Tk 19 crore per day.

Before the war in Europe even began, oil prices were already lodged in an upward trend as demand for the fuel outpaced production after global economies started to rebound from the Covid-19 pandemic.

But with Russia, one of the largest oil suppliers in the world, now engaged in battle with Ukraine, the threat of supply disruptions has only made things worse.

With oil topping $110 a barrel, economists said the subsequent impact on Bangladesh’s economy can be seen in rising import payments, fall in export receipts, pressure on the exchange rate, rising commodity prices and soaring inflation.

BPC Chairman ABM Azad told The Daily Star that the way fuel prices are increasing in international markets is a matter of concern.

“We are monitoring the global situation and informing the government about daily updates,” he said.

Azad informed that the higher authority has instructed them to continue working on keeping fuel supplies normal.

Octane prices reached $114.28 per barrel on March 1, up by about 11 per cent from $102.73 on January 31, according to Platts Asia Pacific/Arab Gulf Marketscan.

The price was $90.04 on January 3.

BPC officials said not only diesel, but also the price of all types of fuel is now in an upward trend in international markets.

Due to such price hikes in the global market, BPC is incurring losses of Tk 13 per litre when selling diesel and Tk 6 per litre when selling octane.

As such, BPC’s daily losses have now reached Tk 19 crore.

“We already raised the oil price but the latest hike is alarming for Bangladesh as once the oil price grows, so too does the price of gas, fertiliser and other commodities,” said Prof Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue.

Besides, the cost of other imported products is also rising, he added.