It should be noted that a total of 34 per cent tax (10 per cent duty, 15 per cent VAT and 5 per cent advance tax and 2 per cent advance income tax) is currently imposed on fuel oil.
Referring to the current challenges of the country's economy, the FBCCI president's letter said that while the country's economy is in the process of recovering from the global Covid pandemic, due to the Russia-Ukraine war, the price of raw materials and shipping or freight fare are constantly increasing in the global market. The cost of production is also increasing.
As a result, survival in the competitive market has become a challenge. In this situation, the price of fuel oil (diesel, kerosene, octane, petrol) has been increased by an average of 47 per cent. The price of diesel used in public transport and agriculture sector has been increased by 42 per cent.
The adverse impact of fuel price hike on public life has already started. The prices of daily essentials are increasing gradually. Public transport fares have increased by 22 to 30 per cent. Many transport companies charge more than the fixed rate. On the other hand, due to the increase in the price of fuel, the cost of transportation of goods has increased, which ultimately has to be borne by the consumer. The president of FBCCI rightly said that due to the increase in the price of fuel oil, the price of export products will also increase and it will push Bangladesh out of the competition.
Apart from increasing the price of fuel, the government has also increased the price of fertilisers. As a result, the production cost of agricultural products will increase a lot. Farmers have to rely more on irrigation due to less rain this year. In the winter, vegetable and boro cultivation is almost entirely dependent on irrigation. As a result, if the price of fuel oil used for irrigation is not reduced, agriculture will also be at risk.
The concern expressed by the FBCCI president in the letter to the PM has already been echoed by various quarters. Economists have expressed concern that it will be difficult to deal with the blow caused to the overall economy, including the industry and agriculture sector due to the increase in the price of fuel oil. The policy makers of the government have also said that if the price of oil in the global market goes down, it will also be reduced in Bangladesh. Prices have already started falling in the international market.
We also agree with the demand of FBCCI president, that the import duty-tax imposed on fuel oil should be withdrawn completely. At present, 34 per cent duty-tax is imposed on fuel oil. And the price has been increased by an average of 42 per cent.
In that case, it is possible to reduce 80 per cent of the increased price if customs-tax is withdrawn. At various times, the situation has been resolved by reducing taxes on many essential commodities including rice and onions. Why will it not be adopted in the case of fuel oil?