Govt cuts jet fuel price

The government has cut jet fuel prices by about 5 percent to $1.19 a litre from $1.25 amid falling petroleum prices on the global market, triggered by recession fears in developed economies.Also for the airlines operating on domestic routes, fuel prices came down 5 percent to Tk 90 from Tk 95 a litre, industry people said yesterday.Local airlines however demanded a further price cut arguing that it would not help them heal what they said were wounds from months of losses. “The fuel price should be reduced by at least 20 percent from the present level to allow us to keep afloat,” said M Haider Uzzaman, chairman of Best Aviation, one of the newcomers to private aviation. The government slashed the prices of jet fuel last week after raising the prices three times since January as the oil price continued to soar on the global market through mid-July 2008.But worries of economic recession in the US and other developed economies have pushed the oil prices down. Oil it hit a record high of $147 a barrel on July 11. On Monday it slipped to $114 a barrel.A senior official of Padma Oil Company, one of the state-run petroleum marketing companies, said the prices of jet fuel were cut due to declining international prices.But the Best Air chairman said it would still remain in trouble despite cost reduction. “We are really passing a rough time,” said the chief of Best Air, which posted a $1.7 million loss in the last four months due to high fuel prices. To pare down losses, the airline had cut its domestic flights earlier.Best Air, one of the five local airlines that started passenger flights with a single leased Boeing 737-200 in mid-January 2008, aimed at profiting from the aviation industry that recorded about 7.5 percent growth a year. While United and Aviana Airways also entered during the last one year, taking the number of airliners to five, including state-run Biman Bangladesh Airlines and private GMG Airlines. A hike in fuel prices put all airlines across the board in trouble. Most operators passed the price burden on to passengers.“The increase in fuel prices has cost us an additional Tk 250 crore. We expect the government to adjust fuel prices in line with the global market prices,” said a senior Biman official.Referring to hajj flights, the official said the carrier would be hurt by lingering high prices.However Nazrul Islam, a spokesman for GMG Airlines, said the price cut would help airlines get back some passengers who chose alternative transports for domestic travel because of pricey tickets.“If the downturn in fuel cost continues, it will benefit both airlines and passengers,” said the official of GMG, the country's biggest private carrier that had earlier cut five international flights out of six amid an aircraft shortage and higher fuel costs.Retired Squadron Leader Syed Habibur Rahman, managing director of Aviana Airways operating only on the domestic routes, said the fuel price had still remained high, considering their operating costs and passenger volume. “It's like a tiny drop in a vast ocean. But a Tk 5 cut in fuel prices matters, really. It has helped us save about Tk 17,000 a day."