Bangladesh may soon prefer to set the petroleum fuel prices in line with with the international market prices.

Such an idea was floated by the Energy and Mineral Resources Division during its meeting with the visiting team of the International Monetary Fund (IMF) on Sunday, said a source at the division.

According to sources, the IMF has been pressing the government to follow a specific formula to set its petroleum fuel prices as per the prices in the international market as part of the lending agency’s $4.7 billion loan agreement, as it does with the LPG price at present.

Currently, at the beginning of every month the government announces the LPG price as per the global market rate.

As a result, no subsidy is being given on LPG.

But the government has to provide a huge subsidy in the petroleum sector.

Officials said the IMF has been pressing the government to withdraw its subsidy by liberalising the petroleum fuel price like the LPG price.

The IMF team was led by Rahul Anand, the head of the Asia Pacific Region of the lending agency, while energy secretary Dr Khairuzzaman Majumder led the Energy and Mineral Resources Division at the meeting.

Official sources said the officials of the Energy and Mineral Resources Division briefed the IMF teams about the measures taken by the division in the energy sector following the government’s loan agreement with the lending agency.

They said that earlier the government had to raise the prices of gas, petroleum and electricity as per conditions of the IMF to receive the $4.7 billion in loan.

“But the lending agency wants Bangladesh fully pursue a policy in setting the energy prices under which it should not need to provide any subsidy,” said a senior official of the Energy and Mineral Resources Division.

However, energy secretary Dr Khairuzzaman Majumder was not available to comment on the issue.