The Center for Policy Dialogue (CPD) has suggested a new pricing model for fuel oil in Bangladesh to ensure energy security and support a transition to sustainable energy.
The think-tank proposed using an Artificial Neural Network (ANN)-based pricing system to create a fairer and more stable system. This model would help absorb shocks from exchange rate fluctuations during imports while considering the country's socio-economic conditions. According to CPD, this method could lower fuel prices by Tk 10-15 per litre.
The proposal was shared at a dialogue titled “Market-based Fuel Pricing: Government-led Initiatives and Possible Revision” held in Dhaka.
Bangladesh Petroleum Corporation (BPC) Chairman Md Amin Ul Ahsan, Bangladesh Energy Regulatory Commission (BERC) Chairman Jalal Ahmed, and Khalid Ahmed, Additional Secretary (Operation) of the Energy and Mineral Resources Division, among others, attended the event.
Prominent speakers included CAB Energy Advisor Professor Dr M Shamsul Alam, BIPPA Vice President Humayun Rashid, and other industry leaders. The session was moderated by CPD’s Research Director Dr Khondaker Golam Moazzem, with a keynote presentation by CPD researchers Helen Mashyat Preoty and Faisal Quaiyyum.
Dr Golam Moazzem explained that in March 2024, the government introduced an automated fuel pricing system to ease its financial burden, following IMF loan requirements. However, this system has faced criticism, prompting the need for revisions. CPD, in collaboration with the Australian High Commission in Dhaka, conducted a study recommending a market-based pricing approach using ANN technology.
Helen Mashyat Preoty highlighted the benefits of adopting the ANN model at the import stage. She said the system would simplify fuel pricing while addressing both fiscal challenges and consumers' affordability. This approach would align with global standards, ensuring fairness and transparency in fuel pricing.
She emphasized the importance of approving the Bangladesh Energy Regulatory Commission’s (BERC) draft regulations on fuel pricing. Once approved, BERC could take full responsibility for monitoring and implementing the pricing system. BERC could also hold public hearings to ensure transparency in the process.
The ANN model’s ability to predict future fuel prices would help consumers and policymakers prepare for a gradual shift to alternative energy sources, she added. This predictive capacity would support long-term energy planning and contribute to sustainable development goals.
BDST: 1755 HRS, NOV 21, 2024
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