Bangladesh raises oil prices by 34-67 pc

DHAKA: The Bangladesh government raised fuel prices by up to 67 percent amid soaring crude oil prices, an official news release said on Tuesday.

Bangladesh imports crude oil and petroleum products, which are then sold at subsidized rates. But surging crude oil prices have strained government finances.

``We took the decision to raise fuel prices, finding no other way to reduce revenue losses,'' M Tamim, an aide to Bangladesh's interim government, said.

Under the new rates, which started immediately, a liter of premium grade gasoline will be raised 34 percent to 90 takas (US$3.42 per gallon). Diesel and kerosene prices were raised 37.5 percent to 55 takas (US$3.04 a gallon).

Liquefied petroleum gas, mostly used for cooking in areas without piped gas supply, saw the largest hike of 66.67 per cent, with a cylinder now costing 1,000 takas (US$14.81; euro9.39), instead of 600 takas (US$8.89; euro5.63).

Fuel prices were last raised in April 2007, when a barrel of crude oil cost about US$60 a barrel on the international market. Recently, crude has spiked above $140 a barrel.

Bangladesh has already seen increases in transport, commodity and food prices in recent months. And the latest fuel prices are likely to add to the cost of living for Bangladeshis, most of whom live on less than a dollar a day.

The price of compressed natural gas, mostly used by vehicles, was doubled in May. Bangladesh has its own reserves of natural gas.