Jet fuel price skyrocketing

The jet fuel price has gone up for the 12th time in 16 months, in a development that is bound to cause further strain to migrant workers, who are struggling to foot the high airfares, particularly to the Middle-Eastern countries.

The price of jet fuel is now Tk 87 per litre after the Padma Oil Company, a subsidiary of Bangladesh Petroleum Corporation (BPC), raised it by Tk 7 a litre. In December 2020, it was Tk 48 a litre.

The latest round of hike in the price of jet fuel, which accounts for up to 46 percent of the operational costs of an airline, will invariably be passed on to passengers, said leaders of different manpower recruiting platforms.

"The airlines will have an excuse to hike the airfare further," said Tipu Sultan, president of the Recruiting Agency Oikya Parishad.

In January last year, the lowest airfare on the domestic route was Tk 3,200. In February this year, it rose to Tk 4,000 for the jet fuel price hike last month.

The airfare will increase by at least Tk 300 for the fresh hike, said Mofizur Rahman, secretary-general of the Aviation Operators Association of Bangladesh.

This can put off many from air travel, which will have a serious impact on the airline industry, said Rahman, also the managing director of Novoair.

The jet fuel price in Bangladesh is already high compared with the neighbouring and peer countries, said Kazi Wahidul Alam, an aviation expert.

"Due to the hub airport, our airlines will have to buy jet fuel from Bangladesh at a higher rate. On the contrary, foreign airlines that are operating to and from Dhaka will buy jet fuel at a lower price from their countries. As a result, we won't be able to compete with foreign airlines."

The government increased the jet fuel price without considering the fact that foreign airlines would be taking over the local airlines' business because of this, he added.

"It's really an ominous sign for our airline sector," said ATM Nazrul Islam, another aviation expert.

Asked about the price hike, BPC Chairman ABM Azad earlier said the local price of jet fuel corresponded to those in the international market.