From bus fares to farming: Tk20 fuel hike spreads pain across economy
The adjustment marks the second fuel price hike since the BNP-led administration took office eight months ago.
For millions of Bangladeshis already struggling with high cost of living, a Tk20-a-litre increase in fuel prices means another blow to household budgets.
The impact is being felt far beyond filling stations, triggering higher bus fares for commuters, larger fuel bills for motorcyclists, rising irrigation costs for farmers, and heavier logistics bills for factories already struggling with acute energy shortages.
The adjustment marks the second fuel price hike since the BNP-led administration took office eight months ago. It comes at a precarious time: national inflation remains well above 8%, while wage growth has lagged behind living costs for more than four years.
The fallout was immediate.
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Public transport operators across Dhaka adjusted fares upwards on several key routes, intercity bus operators raised ticket prices, and freight transporters announced impending rate increases.
For professional ride-sharing motorcyclists, the increase presents a difficult dilemma: absorb the added operating expense and take a direct pay cut, or pass it on to passengers and risk losing trade.
"The earnings from riding throughout the day barely cover food and clothing for my five-member family. Now that fuel prices have increased, I don't know how I will manage my household," said Jasim Uddin, a ride-sharing motorcycle driver in Chattogram.
For those like him, there is little room to absorb another rise in operating costs.
Al Amin, who drives for Pathao in Dhaka, said his daily fuel bill would rise by Tk100-150, adding Tk3,000-4,000 to his monthly fuel expenses.
The problem extends beyond professional drivers.
The burden also extends to daily commuters who rely on two-wheelers for work, school runs, and errands.
"I need my bike every day to take my children to and from school and for necessary tasks. The way fuel prices are increasing, it will put a lot of pressure on my monthly budget," said motorcycle user Jahangir Alam.
A cost that travels through the economy
Fahmida Khatun, distinguished fellow at the Centre for Policy Dialogue (CPD), said the impact would cascade across households, agriculture, industry, and transport.
"Individuals face higher direct travel expenses, but even households that do not purchase fuel directly will be affected as logistics costs push up the price of food and basic necessities," she said, noting that low- and middle-income families would suffer disproportionately.
That transmission mechanism is already visible. In Dhaka, commuters reported Tk5 to Tk10 fare increases on various local routes. Fares for Laguna human-hauliers running from Chittagong Road to Jatrabari rose from Tk20 to Tk25, while long-distance bus fares from Sayedabad to southern districts jumped by up to Tk50. Some Chattogram-bound services increased fares by Tk100.
Freight networks are feeling similar pressure. A truck operator in Rajshahi noted that hauling produce from Bogura to Chattogram would now cost an additional Tk3,000 to Tk4,000 per trip, an added expense that will inevitably reach retail vegetable markets.
"The additional fare will certainly be passed on by businesses to vegetable prices. As a result, consumers will have to pay more," said truck driver Mohammad Shamim Hossain.
At Benapole, the nation's largest land port, truck freight rates to Dhaka surged from Tk22,000-Tk23,000 to as much as Tk30,000. Cargo runs to Chattogram rose to between Tk35,000 and Tk40,000 per shipment.
Businesses fear those additional costs will eventually reach consumers.
Fears of rising essential costs
While retail prices for basic groceries, poultry, and fresh produce remained broadly stable on Sunday, shopkeepers warn that higher transport costs will feed into shelf prices as new wholesale stock arrives.
Miraj Ahmed, a grocery shopkeeper at New Market, said prices had not changed yet due to the fuel price hike.
"Prices of our products have not changed so far because of the fuel price increase. However, if the cost of transporting goods rises, prices of some products may go up in the coming days," he said.
With key staples like chillies, eggplant, broiler chicken, and fish already trading at elevated levels, consumers fear further freight-driven price increases will make daily nutrition increasingly unaffordable.
Hafiz Uddin, a private-sector employee shopping at Hatirpool, said consumers were now waiting to see whether the fuel price hike would affect the markets. "If transportation costs increase, vegetable prices will certainly go up," he said.
Farmers face higher costs
Agriculture is another major pressure point because diesel remains central to irrigation and mechanisation.
Around 70% of the country's irrigation pumps run on diesel. A study by researchers from Bangladesh Agricultural University and the Bangladesh Rice Research Institute found that irrigation accounts for around 20-25% of total production costs for Boro rice.
That means the fuel increase comes directly at farmers' production costs.
"Diesel-dependent agriculture will face higher irrigation, mechanisation and transportation costs. This could potentially raise food prices, but reduce farmers' returns," Fahmida Khatun said.
For farmers already facing weak prices for some crops, the prospect is particularly worrying.
A farmer in Naogaon, Ahsan Habib, said mechanised irrigation had become essential for cultivation, while fuel prices continued to rise.
He said rice prices had fallen and there were few buyers for potatoes, leaving farmers squeezed between rising production costs and weak selling prices.
The dilemma is straightforward: farmers cannot easily pass all their higher costs on to buyers, particularly when market prices are weak. Their margins can therefore shrink even as consumers eventually face higher food prices through transportation and other costs.
Businesses squeezed from both sides
For manufacturers, exporters and small businesses, the fuel increase adds another layer of costs at a time when many are already struggling with expensive inputs, inadequate gas and electricity supplies and weak demand.
Mosharraf Hossain, Managing Director of Mosharraf Group, which has spinning and dyeing mills, told TBS, "Due to the latest increase in fuel prices, additional expenses will rise by nearly Tk40 lakh per month."
Currently, on average, his spinning mill requires over Tk60 lakh worth of diesel per month due to the gas crisis. And dyeing requires Tk75 lakh to Tk80 lakh. Because of the recent price hike, his monthly diesel expenses will increase by about Tk30 lakh.
Mosharraf said expenses had already risen due to using diesel amid the gas shortage. This new increase will further escalate costs, which will overall raise production expenses. "However, we cannot pass this extra cost on to buyers because demand is not increasing," he said.
He added that while gas pressure has slightly increased compared to before, it is still not sufficient to run the factories at full capacity. "Against my requirement of 15 PSI, we are currently receiving only 2.5 PSI. As a result, I am forced to use diesel," he said.
Anwar-ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries, said businesses were already operating under severe pressure.
"At such a time, increasing fuel prices by more than 15% without consulting anyone will create additional pressure across all sectors," he said.
He warned that higher fuel prices would increase production and transportation costs and could force some businesses to scale back operations.
Shams Mahmud, managing director of Shasha Denims, said manufacturing, logistics, agriculture, services and fast-moving consumer goods were already under stress.
For export-oriented businesses, he said, the increase would add to the cost of doing business at a time when competitiveness was already under pressure.
The effect can be particularly sharp for businesses that depend on generators or climate-controlled facilities.
At Benapole, frozen shrimp exporter Shyamol Das said higher fuel and transport costs would increase the expense of maintaining cold-chain facilities and moving goods to Chattogram.
"For export-oriented industries, which are already in a vulnerable state with decreasing competitiveness, it will add to the already increasing cost of doing business," Mahmud said.
Dr Fahmida of CPD also believes Bangladesh's export competitiveness may erode because of the latest fuel price hike.
Was there any way out?
Fahmida noted that while the government has limited alternatives to raising prices due to its severely constrained fiscal space, it could still consider two key options: temporarily reducing high import taxes on fuel oils and managing demand more efficiently.
She explained that although high taxes on petroleum products generate crucial government revenue, temporarily lowering them could have cushioned the impact of the recent price hike and eased economic pressure on transport, agriculture, and essential goods.
"Of course, lower taxes would reduce revenue and require alternative financing. The government should therefore publish the Bangladesh Petroleum Corporation's (BPC) import costs, operating expenses, tax payments, and losses," she said.
"When global oil prices surge unexpectedly, taxes could be adjusted temporarily and reviewed once conditions stabilise – balancing consumer relief with fiscal requirements in a measured manner."
She also urged the government to curb fuel pilferage and prioritise distribution to sector-critical needs.
TBS correspondents Khorshed Alam from Bogura, Abdul Kader from Jashore, Debashish Debu from Sylhet, Sanjib Das from Faridpur, Awal Sheikh from Khulna, and Bulbul Habib from Rajshahi contributed to this report.
