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High jet fuel price hinders aviation growth

Published : 20 Jun 2021 09:10 PM | Updated : 21 Jun 2021 12:17 AM

Higher price of jet fuel is hindering the growth of the country’s aviation industry while airliners fear that passengers will decline in the domestic routes due to higher costs of air travel. 

According to airlines, fare on Dhaka to Saidpur route has been increased seven times in last one year. Airliner officials say that the additional cost is likely to affect wider expansion in air travel in the country. 

The state-owned Padma Oil said that jet fuel price increased in coordination with the international market. 

Masudur Rahman, Managing Director of Padma Oil Company Limited said, “Prices are being increased in coordination with the international market.”

Md Kamrul Islam, General Manager (Public Relation) of US Bangla Airlines told Bangladesh Post, “Due to the stagnated situation of Covid-19, aviation sector has suffered the most. At this moment, there is no logical reason to increase the jet fuel price.”   

“As the fuel price has increased several times over the past few months there is no other way but adjust the additional cost with the passenger tickets,” he added. 

During the stagnated situation of Covid-19, the price of jet fuel on domestic routes was Tk 48 per liter last October. In December last, the price increased by Tk 2 per liter and stood at Tk 50. A month later, the price went up to Tk 53. Later, in February-March-April and June, the price of jet fuel stood at Tk 63. 

However, on international routes, jet fuel price remained at Tk 50.15 per liter. According to the latest decision of Padma Oil Company, BPC has increased the price of jet fuel by Tk 3 per liter. The additional price is activated from June 8.

So far, Padma Oil Company has increased the price of jet fuel seven times in eight months. After the outbreak of the Covid-19 pandemic, the country's airlines are seeing it as a big obstacle in its growth.

Aviation expert ATM Nazrul Islam said, “If the price of fuel continues to rise, it will have a negative impact on the aviation sector.”

Novo Air managing director Mofizur Rahman said, “40 percent of the flight operating cost is used for fuel. So if you increase the price by Tk 3 per liter, you have to adjust the fare accordingly.”

According to the airlines, between 16 lakh and 20 lakh passengers travel on domestic routes every year. However, after the corona pandemic, the number of passengers has been dropped by half due to various restrictions.