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Fuel price hike threat to economy: Experts

Published : 06 Aug 2022 09:59 PM

The abnormal increase in fuel prices will have a major negative impact on the economy of the country, experts say. 

The standard of living of the people will go down further, they said, adding that transportation costs, production costs will also increase which will increase inflation.

Besides, the income of marginalized people will fall further below the poverty line, they added. 

In this regard, former adviser to a caretaker government AB Mirza Azizul Islam said, "Due to the abnormal increase in the price of fuel oil, the cost of transportation and production will increase. If the price of diesel increases, the cost of irrigation will increase. Aman rice production will be disrupted. This will reduce food production. As a result, the agricultural sector will be under great pressure."

He said, "Inflation will increase due to increase in transportation and production costs. This will put the poor, ultra-poor and low-income marginalized communities under great pressure. The rate of poverty in the country will increase. As a result, the country's economy can be greatly disrupted." 

Aziz said, "The price of fuel oil in the international market is slightly lower now. Still, the government has hiked prices due to reduced subsidies. By doing this, the government should no longer have subsidies. As a result, the government should adjust the price of fuel oil as per the international market."

Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Bangladesh Post, "At the moment there is a gang crisis in the factory. There is no power for 5-6 hours due to government directed load shedding. Because of this generator has to be used for 6 hours a day. As generator usage increases, more fuel oil has to be used. In this situation, the increase in the price of fuel oil is a big challenge for the garment sector." 

We hae a lot of orders, he said, adding that products of these orders have to be produced with a large amount of loss. 

"If the price of fuel increases, the transport fare will increase in the country, the truck fare will increase, the price of goods will increase, inflation will increase. Along with these, the salary of the workers should also be increased. In order to survive the loss, there will be no other option but to close down many factories," he mentioned. 

Ahsan H Mansur, executive director of the Policy Research Institute (PRI), said, "Due to increase in the price of fuel oil, inflation will increase in Bangladesh like in other countries of the world. However, if the price of fuel oil falls internationally, if the government adjusts it, inflation will come down. The government should let the economy run its own way." 

Meanwhile, the price of fuel oil has been increased in a notification of the Ministry of Energy on Friday night. 

According to the increased price, the price of diesel and kerosene per liter has been increased by Tk 34 to Tk 114. 

Besides, the price of petrol has been increased by Tk 44 to Tk 130 per liter . 

Apart from this, the price of octane has been increased by Tk 46 per liter Tk 135. 

The new price has been imposed from August 6. 

Earlier last November, diesel and kerosene prices were increased by Tk 15 per litre. 

Then the price was fixed at Tk 80 per liter. 

After the diesel price hike, bus fares increased by about 27 percent, which is much higher than the rate of increase in oil prices. 

Similarly, the launch fare was increased by 35 percent. 

However, the Ministry of Energy said that BPC has made a loss of 8,014.51 crore by selling fuel oil in the last six months from February to July.