As the fuel price hike in May could not satisfy the World Bank and the International Monetary Fund (IMF), the government had committed to make further price adjustments and accordingly increased the prices of octane and petrol last Tuesday.

When asked about the multilateral donors' reaction to Tuesday's adjustment and whether the government is facing any pressure from them for further price rise, Saifur said, "They are telling us to adjust domestic fuel price to that in the international market every day, like India. But, we are saying it's not possible, we will adjust the price regime periodically."

He said Tuesday's adjustment was not a hike but rationalisation of the prices of octane and petrol, which had been the same since May.

Explaining the necessity of another price hike, the minister said if the prices of petroleum products are not adjusted, Bangladesh Petroleum Corporation's loss would go beyond Tk 3,500 crore. However, he said if the global price goes down, the government will go for a smaller hike.

About his meeting with visiting WB Vice President for South Asia Praful C Patel yesterday, Saifur said they discussed a wide number of issues including disbursement of the WB's Development Support Credit (DSC), implementation of Poverty Reduction Strategy Paper (PRSP), governance and corruption.

The third tranche of the DSC worth $200 million was scheduled to be released by July and the foreign finance in last fiscal year's revised budget was prepared taking this amount into account. "But as we did not get it I had to manage it by hidden money," the finance minister said.

In yesterday's meeting he urged Patel to release the DSC-3 by August.

Saifur said the release of the DSC has been deferred due to the government's failure to meet some conditions including decreasing the tariff protection rate. In the current budget the government rather has raised the rate by .9 percent.

Source at the National Board of revenue (NBR) said the rate has been scaled up through supplementary duties, VAT and various other taxes for the benefit of the local industry, but the WB has objection to it.

Saifur yesterday assured Patel that he would take immediate steps to bring down the tariff protection rate and requested for an early disbursement of the DSC.