What will be the impact of soaring petroleum prices on commodity market?
MR: Oil prices have gone up by more than 30 percent in the last 5 months. We are paying more foreign currency to import the same volume of oil due to increased prices. This increase in oil price has not been passed on to the consumers; rather the government, in the form of subsidy, has absorbed it. How long and how much price increase the government would absorb that remains a pertinent question, given the high amount of debt papers being issued to the financial market to fund Bangladesh Petroleum Corporation’s balance sheet. However, prices have started to come down recently it has already dropped to $ 88 per barrel from a high of $100, mostly due to US recession expectation among the market participants. Even though many economists are talking about $75 level for oil price, I think it’s too early to say. If US economy goes through a V shaped recovery because of the aggressive rate cut and giant fiscal stimulus package, we will not have to wait a long time to see the oil price rising
