The energy ministry is currently calculating the impact of global oil price hike on the economy and will submit a report to the finance ministry soon on subsidy requirement to keep petroleum prices static.

Talking to The Daily Star yesterday, State Minister for Energy and Mineral Resources AKM Mosharraf Hossain said, "We will not raise local oil prices because of the international situation as the country is now recovering from the floods."

"We are calculating the financial impact of the rising oil prices on the Bangladesh Petroleum Corporation and will soon send our report to the finance ministry."

World crude oil prices spiralled to a new high of $46.91 a barrel Monday, raising fears of local price hike.

Bangladesh consumes 1.5 lakh metric tonnes (MT) of diesel, 50,000 MT of kerosene, 13,000 MT of octane, 13,000 MT of petrol and 22,000 MT of jet fuel a month. Annual consumption of petroleum products comes to about 38 lakh MT.

"Seventy five percent of the total consumption is diesel and kerosene used to a large extent by farmers and rural people. So any price hike would hurt them most," Mosharraf said.

But BPC Chairman AKM Zafrullah Khan yesterday said the spiralling oil prices have already affected the corporation. It counted Tk 40 crore in loss in June and Tk 70 crore in July because of the market heat-up. August figure for loss may further rise, he said.

Mustafizur Rahman, research director of the Centre for Policy Dialogue (CPD), said, "Surging crude oil prices on the international market will not have any negative impact on domestic consumption if the government, which controls the oil sector, does not kick up prices."

Mustafiz said although the price rise would compel the government to pay more in import bills, the country has sufficient foreign currency reserves to meet the extra obligations.

The BPC sources most of its oil from Kuwait Petroleum Corporation under a state-to-state contract. It also imports from Indian Oil Corporation and Extap, the Singapore concern of London-based oil major Exxon-Mobil.

In April this year, the BPC imported octane at $47.43 a barrel, kerosene at $42.08, jet fuel at $40.9 and diesel at $40.36. In June, the rates were $51.85 for octane, $44.64 for kerosene, $44.87 for jet fuel and $44.55 for diesel. The price further rose in July with the BPC paying $51.01 for octane, $48.68 for kerosene, $47.93 for jet fuel and $47.52 for diesel.