Despite huge potentials, the growth of aviation industry of the country is being seriously hindered due to high fuel cost in domestic market comparing to that of in international market.
The high fuel price is also causing both Biman Bangladesh Airlines and other private aviation companies to lose profit while operating flights in domestic routes even though demand for domestic flights is increasing.
Already United Airways, GMG Airlines, Best Air, Arrow Bengal Airlines and Air Parabat have shut down their business in the country due to increased operating costs because of hike in fuel prices and other charges. It is learned that Bangladesh Biman has an outstanding of Tk 1291 crore to state-owned Bangladesh Petroleum Corporation (BPC) till September 30 this year.
Md Abu Saleh Iqbal, general manager (marketing) of Padma Oil Company Limited, told Bangladesh Post that the country’s airports require 12-13 lakh tonnes of A1 jet fuel on an average per day. And all the airlines of the country procure their fuel from the state owned oil company.
Regarding the oil preservation capacity of Hazrat Shahjalal International Airport (HSIA), he said the airport has a capacity of almost 8500 tonnes of oil but the price is a bit higher than that of in the neighbouring countries.
Jet A1 fuel price for international routes is Tk 65 per litter while it is Tk 88 for domestic routes. In neighbouring Kolkata, per litter fuel costs Tk 48 which is Tk 44 in Kuala Lumpur and Singapore.
This discriminatory fuel price is causing the domestic airlines to lose the competition with the foreign ones like Etihad, Emirates, Singapore and others who purchase jet fuel at a lower cost.
Thus it is posing serious threats to the potentiality and sustainability of the country’s domestic aviation.
Jet fuel price is 35 percent higher in Bangladesh. As a result around 50 percent of the total operating cost of an airliner is spent for fuel alone, said Abu Saleh Iqbal.
Sources said that Biman has already submitted a proposal to the higher authorities of the government. Even in 2014, government high officials recommended to provide jet fuel at a competitive price for both domestic and international routes.
Mohiuddin Ahmed, general manager (accounts and finance) of Padma Oil Company Limited, said it’s true a recommendation came from Civil Aviation and Tourism Ministry. But no such recommendation was made by the energy ministry as yet.
Regarding the high cost he said discussion is going on to reduce the price but it totally depends on BPC as they import the fuel and fix the price.
Sayed Mohammad Mozammel Haque, director (operation and planning) of BPC, told Bangladesh Post that jet fuel price in Bangladesh, comparing to that of in Kolkata, is always one cent lower. This fuel price is even higher in Kathmandu and other countries.
About the fuel price difference in international and domestic routes he said, “We calculate fuel price in our local currency but when dollar price ups, fuel price changes in our country.”