Impact of tax cut on diesel price will be visible within 2-3 days: BPC chairman

The impact of the reduction in advance tax and import duty on diesel prices could be visible within the next two to three days, said Bangladesh Petroleum Corporation (BPC) Chairman ABM Azad.

However, it depends on the Energy Ministry when the benefits will reach the consumer level, the BPC hairman said during a press briefing on Monday.

The government on Sunday slashed import duties on diesel and rice – by over 10% in a move to tame soaring commodity prices that have hit the country's people hard, even more so those in the limited-income group. With the reduction, the duty on diesel imports comes down to 22.75% and that of rice to 15.25%.

Fuel price hike has been one of the most discussed issues in the country that have further fueled the already high inflation, causing people to fall into grave distress.

With the slash in import tax on diesel, which accounts for about 73% of the total fuel consumption in the country, by about one-third, the government aims to give some relief to the people.

The tax cut has created an opportunity to reduce costs of transportation, irrigation, and other services that rely on diesel.

As a record hike in fuel prices on 5 August by the government triggered severe criticism from people across the board, the high-up in the government promised to reduce the fuel prices.

Apart from sedans or SUVs, public transports, and all types of freight transports are operated using diesel. Following the recent hike in diesel price, fares of those transports have already gone up, and subsequently prices of almost all commodities have surged.

The government increased the diesel price by Tk34 to Tk114 per litre, octane by Tk46 to Tk135 and petrol by Tk44 to Tk130 per litre. The price of kerosene was also increased by 42.5% to Tk114, in the across-the-board raise.

At present, around 34% tax is levied on the imports of liquid fuel. Apart from this, an additional 15% VAT is imposed at the distribution level and another 2.5% VAT is levied at the business level.