Reasons or causes of falling or reducing oil price and it's effects in Bangladesh.

1. The causes of falling the oil price & effects in
Bangladesh
Oil prices have been in a free-fall since last few years. The price of West Texas Intermediate crude
oil during June 2014 was around $108 a barrel. This price has sharply fallen by around 65% and
stood at $38 a barrel in August 24, 2015. Now the price stood at $45.22 a barrel in August 29, 2015.
There are many causes and effects of the falling oil price according several researchers and media.
In the supply side, the domestic production
of the United States has increased to almost
double which reduces the oil imports from
oil exporting countries like Saudi, Nigerian
and Algerian Oil. As a result, these oil-
exporting countries have to compete in
Asian markets with other competitors to get
the customers. This increased competition
has forced these competing countries to
reduce the price of oil. Almost all exporting
countries like Venezuela, Iran, Nigeria,
Ecuador, Brazil and Russia are increasing
pumping to maintain the total revenue. As a
result, the cumulative supply of oil in the
world market increases. This stimulates to
reduce the price of oil.
On the demand side, the economies of Europe and developing countries are enervating and the
increasing demand for energy-efficient vehicles. Moreover, the recent report of the Chinese
production of industrial products also decreases during the recent periods. China’s recent
devaluation of its currency suggests the economy of the world’s biggest oil imports may be reduced
in future.
In this situation, the oil exporting countries are suffering economic and political turbulence from the
sharp - fall of oil price. However, Bangladesh is standing in the green zone and getting the benefits
from falling oil price as an importer. However, the retail consumers and the business enterprises of
Bangladesh have not been benefitted despite of the falling oil price. Bangladesh Petroleum
Corporation (BPC), the only oil importing Government Agency, is authorized to buy and sell the oil
in Bangladesh. It is sailing Octane at the price Tk 99 per liter since the world price was $110 a
barrel last year whereas the price is now $45 a barrel. This price is almost high in the world.
Therefore, the BPC, as a government-sponsored firm, cannot make maximum profits as like the
Monopoly Company in Bangladesh. So the government should reduce the oil price in domestic
market for sharing the benefits of falling oil prices to the retail consumers.