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Aviation industry faces setback

Jet fuel price up 120 pc in last 18 months

Published : 17 Apr 2022 10:50 PM | Updated : 18 Apr 2022 01:54 PM

The aviation industry in Bangladesh is facing another major obstacle to its growth as the government has raised jet fuel prices. The only way to survive is to get subsidies from the government, businessmen involved in the aviation industry said.

This has come as a huge setback for the industry at a time when commercial aviation globally has already been hit hard by the Covid-19 pandemic. The jet fuel price has increased by 120 percent in the last 18 months. 

The concerned authorities have again increased the price of jet fuel which has now stood at Tk 100 per liter. Industry sources said that such a move will be a barrier to their growth and they have to adjust the high jet fuel price with ticket fares on any route. However, they sought government subsidies to survive. 

USBangla Airlines General Manager Kamrul Islam told Bangladesh Post, “One of the major obstacles of aviation growth is fuel price. We have noticed many airlines could not survive due to the high cost of jet fuel. Fuel price is 40 percent of the total operation cost. For the survival, we have to adjust the price with our cost of the ticket.” 

“If the aviation and tourism industries are to survive, the government should consider subsidizing the price of jet fuel. Without this we would not be able to compete with foreign airlines,” added Kamrul Islam.

According to market data analysis, jet fuel prices in the last three months have gone up by Tk 25 per liter and in the last 18 months, they rose 120 percent. Per liter jet fuel price was Tk 46 in October 2020, and now in April 2022, per liter, jet fuel price is Tk 100. 

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

However, as per the global situation, the expert suggested that unless the war between Russia and Ukraine comes to an end, per barrel oil price is not going down. Hence it is uncertain whether the jet fuel prices will settle back to their old prices. 

During the stagnated situation of Covid-19 crisis, the price of jet fuel on domestic routes was Tk 48 per liter in October 2020. In December 2020, 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.  

In July last year, the price of jet fuel rose to Tk 66, in August it was Tk 67, in October it was Tk 70 and in November it stood at Tk 77. Then in December and January, it decreased by Tk 2 but in February and March, it increased by Tk 7 and increased by Tk 87. And finally in April it was increased to Tk 13 at a time.