The consumers are now paying Tk 114 for a litre of diesel and kerosene and Tk 135 for a litre of octane. Besides, each litre of petrol now costs Tk 130.

Energy expert Md Tamim feared that the economy will not be able to bear the pressure of the recent price hike. Meanwhile, state minister for power, energy and mineral resources Nasrul Hamid said the government would reconsider the fuel price once the situation becomes normal.

The ministry also said that it had earlier raised fuel oil prices in November last year. The prices of diesel and kerosene were increased by Tk 15 to Tk 80 per litre, but the government then refrained from hiking the prices of octane and petrol despite the upward trend of price in the global market.

The economic activities gained pace at the beginning of the fiscal year 2021-22 when the pandemic situation improved slightly.

The price of refined oil started to soar in February this year after Russia invaded Ukraine. A barrel of diesel, which was USD 83.35 in December, last year, stood at USD 139.43 in July while octane price rose from USD 85.25 to USD 114.96.

The ministry said if the price of diesel per barrel drops to USD 74.04 and octane to USD 84.84 in the international market, it would be possible to sell diesel and octane at Tk 80 and Tk 89 per litre respectively. But it is quite impossible now.

The BPC made losses of around Tk 780 million (Tk 78 crore) on diesel and octane in July. The losses were over Tk 1 billion (Tk 100 crore) in the previous two months. The total losses of BPC from February to July stood over Tk 8,014 crore.

Now, the BPC will count losses of Tk 8.13 per litre despite selling it at Tk 114 as each litre of diesel costs BPC Tk 122.13, claimed the ministry handout.

Referring to the relatively high price in neighboring India, the ministry said each liter of diesel was sold at Rs 92.76 (Tk 118.09) in Kolkata last month, which was Tk 34.09 higher than the Bangladeshi price. Besides, each liter of petrol was selling at Tk 44.42 higher than the Bangladeshi price.

The government has taken the initiative to prevent smuggling of fuel from Bangladesh to India.

Energy expert Md Tamim said it is quite irrational to raise the issue of smuggling right now as there was always a price difference between Bangladesh and India.

The ministry handout also said the BPC's financial capacity has decreased due to the fuel price hike in the international market. Besides, the fuel price has to be raised in the aftermath of the high dollar exchange rate.

The new price came into effect on Friday midnight. The industry insiders said the government never hiked fuel prices so much at one go. It is a step to bring the government subsidy to energy to zero.

Amid huge economic pressure, the government is pursuing a USD 4.5 billion loan from the International Monetary Fund (IMF). One of the preconditions of availing the loan is revoking subsidy in the energy sector and the government presumably fulfilled it by hiking the price.