Centre for Policy Dialogue recommended the government to reinstate the earlier prices of diesel and kerosene immediately to maintain stability in economic, social and political arena.
"We recommend the government to reinstate the previous rates of fuel as an immediate step to maintain stability," Dr Fahmida Khatun, Executive Director of CPD, said at a press briefing on Wednesday.
The CPD organised the press briefing on the impacts of petroleum fuel price hike. CPD distinguished fellow Prof Mustafizur Rahman, director Dr Khondaker Golam Moazzem and other directors spoke on the occasion.
It said in a period between fiscal year 2014-15 to 2020-21, Bangladesh Petroleum Corporation (BPC) made a profit of nearly Tk 43,138 crore and the state-run organisation said it incurred a loss of over Tk 1,100 crore in the last five months.
"The accumulated profits of BPC should be enough to provide some cushion despite the previously accrued losses and the government can keep the prices at their previous levels through subsidies or tax and tariff cuts," Dr Fahmida Khatun said.
"In view of recovery from the adverse impacts of Covid-19, stability of fuel price is critically important given the 'strategic' nature of the commodity," she said.
Mustafizur Rahman said the decision to raise fuel prices is unethical from all points of views-economic, social and political.
He also said the 26.5 per cent increase in bus fares against the 23 per cent rise in fuel price is totally unjustifiable when fuel covers only 40 per cent of the total cost of a bus.
In that calculation, maximum 10 per cent bus fare could have been increased, he added.
Dr Golam Moazzem said the government could easily cover its possible losses of Tk 7,200 crore without increasing the prices by withdrawing 34 per cent taxes on petroleum import.
He noted that the government has a plan to earn Tk 7,808 revenue from the taxes on import of petroleum fuel.
"If the taxes are withdrawn, the income will not come. Otherwise, there will be no loss on the part of the government, but people will get a big relief," he added.
Consultation with all stakeholders should be part of the price setting mechanism instead of arbitrary price setting practices, it recommended.
The government does not lower fuel prices when there is a fall in the global market but it becomes costlier when there is a rise in international rates, it said.
Fuel prices hit its lowest of US$23.3 per barrel in April 2020 following the Covid-19 outbreak, the CPD said.
But fuel prices were not adjusted in the domestic market that time following the international rate, said Dr Fahmida Khatun, executive director of the CPD.
The centre also stressed the need for improvement in BPC's accountability and transparency and cutting corruption of fuel marketing companies.
"People have been struggling to survive the Covid-19 impacts as their incomes have come down. At this stage, such a step is not a positive move for the economy," the CPD observed.