The government raised fuel prices by BDT 20 a litre on Sunday across diesel, kerosene, petrol and octane, effective Monday, citing the war in the Middle East and higher international prices and freight charges that have left the state oil company with mounting losses.

Diesel will sell at BDT 135 a litre, kerosene at BDT 155, petrol at BDT 160 and octane at BDT 165 under a notice issued by the Energy and Mineral Resources Division. The fuels previously sold at BDT 115, 135, 140 and 145, respectively.

The division said international prices and freight charges had risen significantly since March because of the conflict in the Middle East, and that the government had not passed the full increase on to consumers in the public interest. Bangladesh Petroleum Corporation (BPC) lost about BDT 228.75 billion between March and August as a result.

The government raised diesel prices by BDT 15 to BDT 115 a litre on April 19, alongside increases of BDT 18 for kerosene, BDT 19 for petrol and BDT 20 for octane. Kerosene, petrol and octane rose by a further BDT 5 in June. Prices then held steady through July, August and September.

At current international prices, BPC loses about BDT 89 on every litre of diesel it sells, or roughly BDT 1.09 billion a day. Diesel alone could result in annual losses of about BDT 400 billion, the notice said. The BDT 20 increase could reduce annual losses by about BDT 100 billion.

Higher fuel costs may push up transport, agricultural and freight expenses, with effects also likely to be felt in the market for everyday essential goods.