Fuel price hike adds to people's woes

The record hike in fuel prices is feeding into costs of everything, including transportation and production, eventually adding to the suffering of limited-income people who are already squeezed by soaring living costs, said economists and stakeholders at a dialogue on Wednesday.

The lack of foresightedness has prompted the government to raise fuel prices, said Ghulam Rahman, president of Consumers Association of Bangladesh (CAB), at the event on impacts of fuel price hike on rising commodity prices.

Nagar Unnayan Sangabadik Forum organised the event at the Dhaka Reporters Unity.

The government has now fallen into a trap because the measures it took were not right for long-term results, he noted.

For example, it resorted to rental and quick rental power plants to mitigate the power crisis in 2006-07. The decision was right for that time – but not for a long time, the CAB president said.

The government should also have gone for long-term power solutions by shutting those down, but it did not do so, he pointed out.

"That is why the recurring power outages have come back," Ghulam Rahman said.

Presenting a keynote paper at the programme, senior journalist Arun Karmakar said the government is now facing a deficit to meet its current expenditure. The fuel prices have been raised because the Bangladesh Petroleum Corporation has no money to buy oil after August.

The fuel price hike is affecting common people. Prices of all daily essentials are going up, he also said.

The economy is now going through an inflationary pressure, which is feared to go into double digits soon, he added.

Professor Dr Md Reazul Haque, a professor of Dhaka University's Development Studies Department, said production costs of farmers have increased because of a rise in prices of fertilisers and diesel. 

They are now having to rely more on irrigation by diesel-run pumps owing to a record low rainfall in July, he noted.

Besides, in the northern region, farmers are producing maize thrice a year by reducing costly paddy cultivation, which will create a negative impact on food production.

LGRD Minister Md Tazul Islam at the event said, "We have not imported inflation, rather it entered by force like in other countries across the globe. It is still comparatively low in our country."