Why govt chose not to hike fuel price for April?
Hiking fuel prices could push up transport costs, trigger a wider price spiral and erode public goodwill toward the newly formed government
The government kept fuel prices unchanged for April, despite a recent uptick in international oil markets, prioritising public relief over immediate price adjustments.
In recent days, authorities had been considering a partial alignment of domestic fuel prices with global trends – a move that could have led to a hike – but ultimately shelved the idea in view of mounting public hardship, officials said.
Sources at the Energy Division said that, even with a significant subsidy burden, the government is leaning towards maintaining existing prices for the month of April.
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Following the US-Israel attack on Iran and the closure of the Strait of Hormuz – through which about 20% of global oil shipments pass – Brent crude prices have surged to around $116 per barrel, up sharply from the pre-war range of $70–$75.
In the face of soaring oil prices, Bangladesh has had to significantly adjust its energy subsidy, raising it to Tk24,000 crore to cover fuel and LNG imports, with Tk7,000 crore earmarked for fuel imports, and Tk17,000 crore for LNG.
Officials said the decision not to raise fuel prices was taken after considering multiple factors, particularly the inflationary pressure across sectors that would heavily impact consumers.
Another key concern is the uncertainty in the global energy market.
Officials said that even if prices were increased now, there is no guarantee of a return to pre-war stability, which could further aggravate public discontent–especially for a newly formed government.
Officials said that if the government were left with no option but to raise prices to manage the growing subsidy burden, diesel would have been the most effective lever, given its dominant share in domestic consumption – around 12,000-12,500 tonnes a month.
However, any increase in diesel prices would have an immediate and widespread impact on daily life.
Transport costs would surge, triggering fare hikes and commuter frustration.
The ripple effects would quickly spread to kitchen markets and grocery stores, fuelling a broader price spiral.
Such a scenario, officials warned, could erode public goodwill toward a government that has barely begun its tenure.
Recently, State Minister for Power, Energy and Mineral Resources Onindha Islam Amit said that Bangladesh Petroleum Corporation is currently paying around Tk167 crore daily in fuel subsidies due to the global price surge linked to the Iran conflict.
The decision to hold prices unchanged is also a strategic move to discourage fuel hoarding.
Officials said that maintaining current prices could prompt hoarders to release stored fuel into the market, as storing costs begin to outweigh potential gains.
