Dip in international oil price | The Daily Star
12:00 AM, January 18, 2016 / LAST MODIFIED: 12:00 AM, January 18, 2016

Editorial

Dip in international oil price

Not reducing home price defies logic

The logic being offered by the government for not adjusting the oil price in the country with the international price is that the BPC is making up for the huge 'losses' it has run up over the years. For one thing the BPC losses were made up by government subsidy almost as much as the BPC had accumulated since it began operating in 1997, which it has not yet paid back. And in the last two years since early 2014, when the prices started to fall, the BPC has more than made up the 'losses' by keeping to the previous price. So, why the rigid stance on reducing the oil price? 

We want to state that neither the government nor the BPC is a business house nor should they be working with a profit motive. Losses incurred due to fluctuation of prices of an important product can be adjusted but not in the manner that the BPC has done. While it has been prompt in re-fixing prices, upwards, with the rise of oil price in the international market, the benefits of the dip in prices have not been felt by the people in the last two years.

Low oil price has a positive trickle down effect on the economy. It boosts investment and adds to the GDP apart from making consumer goods cheaper. Instead of recovering losses by making the users pay more than three times the cost price of oil, the taxes can be levied on new investments and products. Profiteering by keeping high oil price at home compared to the cost price makes poor economic sense.

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