Fuel crisis squeezing household budgets as food prices rise

The government raised fuel oil prices Saturday midnight to rein in mounting subsidies. The adjustment has had an immediate knock-on effect on transport fares and commodity prices, reflecting Bangladesh's heavy reliance on diesel-powered logistics.

The key question, however, is whether these cost increases are proportionate to the fuel price hike or significantly inflated. Take freight rates as an example. The cost of hiring a covered van from Dhaka to Chattogram jumped 30-40% to Tk20,000-Tk25,000 on Monday, up from Tk14,000-Tk15,000 on Friday.

Pickup fares from Bogura and Jashore have also risen from Tk12,000 to Tk15,500. This is despite diesel prices rising by around 15% to Tk115 per litre.

A typical truck or covered van consumes roughly 80-100 litres of diesel on the Dhaka-Chattogram route. Even at the higher end, the fuel cost increase would be about Tk1,500 per trip. In practice, however, freight charges have gone up by Tk6,000-Tk10,000.

"There is a shortage of vehicles due to fuel constraints. Those still operating are losing time refuelling, often stopping at multiple filling stations," said Syed Md Bakhtiar, executive president of the Bangladesh Truck and Covered Van Owners' Association.

In Dhaka's wholesale hubs, these inflated overheads have translated into immediate hikes for daily staples, leaving low- and middle-income households to tighten their belts. Egg prices, for instance, have risen by Tk2-Tk2.5 per piece, due to higher transport costs.

But the actual impact of the fuel hike should be no more than 20 paisa per egg, according to Mohammad Halim, a wholesale trader at Moghbazar.

Rice prices have increased by Tk4 to Tk6 per kg over the past week. Miniket rice is now selling at Tk82 to Tk85 per kg, up from Tk78, while Najirshail has risen to Tk88 to Tk94 per kg. Local lentils have increased by Tk10 per kg, now selling at Tk150 to Tk160.

Edible oil and sugar prices have also climbed. Loose soybean oil is selling at Tk170 to Tk175 per litre, while sugar has risen to Tk135 to Tk145 per kg amid supply shortages.

Vegetable prices have climbed across the board, particularly for items sourced from outside Dhaka. Brinjal now sells at Tk100-Tk120 per kg, while most other vegetables, including gourds, beans and leafy varieties, have moved into the Tk70-Tk120 per kg range. Even staple items like tomatoes, carrots, onions and cabbage have edged higher, tightening household budgets.

Spice prices have risen more sharply in comparison, with cardamom seeing the steepest jump, nearly doubling to Tk4,500–Tk6,099 per kg. Cumin, cinnamon, cloves and bay leaf have also recorded steady increases, adding sustained pressure on kitchen costs.

While poultry has remained a relative silver lining – with Sonali chicken at Tk360 to Tk380 and broiler chicken at Tk170 to Tk180 per kg – the fish market has seen a broad increase of Tk40 to Tk50 per kg.

Large tilapia is now selling at Tk300 per kg, rohu at Tk450, and pangash at Tk200, while the prized hilsa is fetching between Tk2,200 and Tk3,000 per kg.

Beyond transport, wholesalers like Khalek Uddin at Moulvibazar say that higher energy prices are driving up cold storage and packaging costs, further narrowing the margins.

At Karwan Bazar, trader Nurul Islam noted that the relentless rise in procurement costs has left merchants with little choice but to pass the buck to consumers, who now face an increasingly difficult battle to manage basic food expenses.