Asian – Dispatch

Passengers in for steep fares; airlines warn of flight suspensions

The Bangladesh Energy Regulatory Commission, in an unprecedented move, yesterday hiked jet fuel prices by a whopping 80 percent at the consumer level, citing volatility in the global market linked to the US-Israel war on Iran.

Experts say the move will deal a blow to air travellers and the country’s airline industry.

Under the revised structure, the price of jet fuel for domestic flights has been set at Tk 202.29 per litre, up from Tk 112.41. Meanwhile, jet fuel for international flights will cost $1.3216 (Tk 162.21) per litre, up from the current $0.738 (Tk 90.58).

Aviation experts and top officials of different private air operators said that if the decision is implemented, airlines in the country will face severe financial pressure, and passengers will ultimately bear the burden.

They said the increase in taxes on jet fuel will further raise overall operating costs, hindering the sustainable development of the aviation industry. They also warned that the price hike could lead to a situation where flight operations on domestic routes may be completely suspended.

According to a BERC notification, the new rates were determined based on the average international market price, particularly Platts rates, between March 5 and 22.

On March 8, BERC raised the price from Tk 95.12 to Tk 112.41 per litre. Within 16 days, the price was increased again by around 80 percent to Tk 202.29 per litre.

Similarly, for international routes, jet fuel prices have been increased in two phases over the same period from $0.6257 (Tk 76.80) to $0.738 and then $1.3216 per litre.

Over the past 16 days, prices have gone up by about 115 percent, pushing the aviation sector towards a severe crisis.

For domestic flights, air operators will have to pay Tk 1,200 as duties and VAT, up from Tk 150, said Mofizur Rahman, secretary general of Aviation Operators Association of Bangladesh.

BERC said the latest adjustment was made in line with its legal mandate under the BERC Act-2003, and follows a pricing framework introduced in May 2025 that allows periodic revisions in response to global fuel price movements.

The new rates came into effect from yesterday midnight and will remain in force until further notice.

Jet fuel prices in Bangladesh are significantly higher than in regional and global markets.

Data from different airports show prices at around $0.62 per litre in Kolkata, $0.603 in Muscat, $0.587 in Dubai, $0.581 in Jeddah and $0.584 in Doha. In other regional hubs, prices stand at $1.098 in Bangkok and $0.586 in Singapore — all substantially lower than in Bangladesh.

Immediately after the BERC’s announcement, Aviation Operators Association of Bangladesh (AOAB), a platform of private air operators’ owners, expressed deep concern over the 80 percent price hike — terming it harmful and unjustified for the country’s aviation sector.

Contacted by The Daily Star, AOAB Secretary General Mofizur Rahman said, “The relevant ministry has already stated that there is no shortage of fuel oil in the country. Around 25 oil-carrying vessels have arrived in the past 22 days and the oil was purchased at predetermined prices. At the same time, oil prices have declined in the international market in recent times.

“In this context, increasing jet fuel prices on such a large scale based on the apprehension of future price hikes is not justified in any way.”

Mofizur, also managing director of private airline Novoair, added that the jet fuel price increase is unusually high compared to neighbouring countries.

“While India and Nepal have kept jet fuel prices unchanged, Pakistan increased prices by 24.49 percent and the Maldives by 18.54 percent, whereas the increase in Bangladesh is around 80 percent.

“Despite incurring loss, we will have to operate flights for those who have already bought tickets. But at one stage, we will have no alternative to grounding flights.”

AOAB urged the government to urgently review the decision and set a realistic and acceptable price to ensure stability and growth in the country’s aviation sector.

Contacted, Kazi Wahidul Islam, an aviation expert and editor of The Bangladesh Monitor, a weekly publication on aviation and tourism, said, “The aviation industry of Bangladesh has already been struggling for long for multiple reasons. They are crawling to survive. The latest decision of huge increase of jet fuel at one go will give a severe blow to the private air operators.”

Alam, also a former board member of Biman Bangladesh Airlines, said it will also impact the country’s tourism, economic and other sectors related to the aviation industry.

Another aviation expert, ATM Nazrul Islam, who is also former managing director of the now defunct United Airways, said, “After the US-Israel imposed war on Iran, we could assume that the price of jet fuel will increase … . But such a large-scale hike at one go will have serious adverse impacts … . and it is the passengers who will have to ultimately pay for it.”

Kamrul Islam, general manager (public relations) of US-Bangla Airlines, a private air operator, said, “We will not be able to sustain under the present situation…. If local airlines lose sustainability, the aviation market will be fully controlled by the foreign carriers.

“Jet fuel accounts for around 50 percent of an airline’s operating costs on any route… It is the passengers who will have to bear the additional cost, for which air traffic volume might decline.”

Source: The Daily Star