The price of diesel and kerosene has been reduced by Tk1 per litre, bringing the revised rate to Tk104 per litre from the previous Tk105.
Ministry of Power, Energy and Mineral Resources announced that the new prices would take effect from 1 January 2025.
A gazette notification detailing the price adjustment was issued on Tuesday (31 December).
According to the notification, the prices of octane and petrol will remain unchanged at Tk125 and Tk121 per litre respectively.
The adjustment follows the government's adoption of an automatic pricing mechanism, aimed at aligning domestic fuel prices with fluctuations in the global market.
Under this system, monthly revisions will be implemented to ensure price consistency with international trends.
The gazette also confirmed that the commissions for Bangladesh Petroleum Corporation (BPC) and other stakeholders will remain unaffected, with only import costs subject to monthly variations.
This pricing mechanism is part of the government’s decision to phase out subsidies on fuel, a move influenced by the International Monetary Fund (IMF).
The "Guidelines for Automatic Fuel Price Determination," published on 29 February, outline the formula for monthly price adjustments.
Notably, the formula incorporates an 'α factor' to maintain a minimum price difference of Tk10 per litre between diesel and octane, reflecting octane’s classification as a luxury item predominantly used in private vehicles.
The recent adjustment marks the second reduction in diesel and kerosene prices in recent months, following a Tk0.50 per litre reduction in November, when rates were fixed at Tk105 per litre.
At that time, octane and petrol prices were also left unchanged.
A sharp price hike on 5 August 2022 remains unprecedented, when diesel and kerosene rates surged by Tk34 per litre, and petrol and octane by Tk46 per litre.
This increase set diesel and kerosene prices at Tk114 per litre, with petrol and octane at Tk135 per litre. The hike led to a maximum 22% rise in public transport fares.
Similarly, in November 2021, diesel and kerosene prices were raised from Tk65 to Tk80 per litre, prompting a 27% increase in transport fares.
Octane and petrol prices have consistently been higher than diesel due to their classification as luxury goods.
This differentiation is embedded in the pricing formula to reflect their predominant use in private vehicles.
The new pricing structure aims to stabilise the domestic market while reducing reliance on government subsidies and ensuring transparency in price adjustments.
