In a significant move on Thursday, the government has reduced down the price of furnace oil from Tk 60 to Tk 42.
The Ministry of Power, Energy and Mineral Resources has issued a gazette notification signed by in that regard.
The government circular signed by Mohammad Ahsanul Zabbar, Additional Secretary of Energy and Mineral Resources Division said that the new price will be effective from 12am, 01 April, 2016.
Earlier in this week State Minister for Power, Energy and Mineral Resources Nasrul Hamid said that the price of furnace oil would be reduced.
Furnace oil in the country is usually being used to produce electricity. Besides, many industries use the furnace oil.
The government however has made no decision about reducing down the price of other fuel including petrol, diesel and octane.
This price reduction will not put any effect at the consumer level. It will however reduce down the cost of electricity for the power producers.
Currently, 2,508MW of electricity which is around 21.56% of the total electricity generation is being produced through furnace oil, while 7.97% or 927 MW electricity are being produced from diesel and from gas 61.62% or 7169 MW.
Power Development Board Member (Generation) Khaled Mahmood told energynewsbd.com that the price of producing per unit electricity from furnace oil is Tk 13-14.
Now the price of furnace oil is reduced by Tk 18 per liter, per unit production cost will be reduced down to Tk 11-12. It will save the PDB Tk 200 crore per year.
State-run Bangladesh Petroleum Corporation (BPC) usually imports fuel oil from 13 international companies.
Presently, the BPC imports around 1.2 million tonnes of crude oil and 4.2 million tonnes of refined oil.