The government’s fuel price hike justifications ring hollow

In the wake of the price hike of diesel and kerosene, suddenly declared on the night of November 3, the whole country has fallen into chaos. Transport owners and workers have called a strike to protest the price hike. The price of essential commodities has begun to rise across the country. Low and middle-income groups are now worried about finding ways to cope with the extra spending. 

The government has tried to justify the hike by publishing an advertorial in daily newspapers on Saturday, three days after the announcement.

The price of per litre diesel was Tk65. The consumers will now have to buy one litre of diesel or kerosene for Tk80. 

In the advertorial, the Energy and Mineral Resources Division said they increased the price of diesel and kerosene for three reasons. The ministry said that with rising oil prices in the international market, the state-run Bangladesh Petroleum Corporation (BPC) has been incurring loss since the beginning of the current fiscal year. BPC's losses stood at Tk1,147.60 crore over the last five and a half months. 

The government has had to adjust the loss via subsidies. Secondly, the BPC has taken up different development projects, with a project cost of Tk33,734.78 crore, to ensure energy security. If BPC became a losing enterprise, these development projects would be hampered and pose a threat to ensuring energy security. 

"According to Bangladesh energy regulatory Act 2003, Bangladesh Energy Regulatory Commission has the jurisdiction of setting the price of petroleum products after hearing the opinion of stakeholders, including the consumers- - Professor M Shamsul Alam, Energy Advisor, Consumers Association of Bangladesh." 

However, energy experts are not satisfied with the government's explanations. They see ill-motive behind this sudden and high price at a time when the economy is trying to recover from the pandemic.   

"The government has increased the price of diesel and kerosene illegally. According to Bangladesh energy regulatory Act 2003, Bangladesh Energy Regulatory Commission has the jurisdiction of setting the price of petroleum products after hearing the opinion of stakeholders, including the consumers," said Professor M Shamsul Alam, Energy Advisor, Consumers Association of Bangladesh. 

"The Energy and Mineral Resources Division declared the price hike in the dead of the night, secretly," Alam added. 

He alleged that the rights of consumers have been completely violated because consumers were not given any opportunity to give their opinions.

"No one got a chance to critique the price hike decision. If BPC is incurring a loss, they are supposed to forward the price hike proposal to the BERC. The BERC is then supposed to scrutinise the proposal and after holding public hearings, decide on it," Alam explained.

He said that those officials involved in the price hike should be held accountable. 

The Energy and Mineral Resources Division claimed that the government has increased the price for national interest. However, Alam opined that the government did not care in the least about the public's suffering. 

"People do not believe that the price hike supports our national interest. The government did not do this to look out for ordinary people," Alam added. 

Professor Anu Muhammad, the Member Secretary of the National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports, believes that the government has not faced any significant challenge recently to justify the increase in the price of diesel and kerosene. 

"I think the government has raised the price of diesel and kerosene to benefit businessmen," Muhammad said. "All sectors - agriculture sector, transport sector - will suffer the consequence of the price hike."

He also said production costs will increase in agriculture. Usually, farmers in our country do not receive fair prices. The economic situation of farmers will get even worse now. 

Furthermore, the people who use public transportation will also suffer the consequences. They will be under pressure once daily expenses rise. 

"The transportation costs will increase the price of all essential commodities and will have a serious impact on our daily lives. From the working class to the middle class, people will undoubtedly be under pressure. The net income of the people will decrease," Muhammad explained.  "Lots of people have already gone under the poverty line during the pandemic." 

"The government has taken up a policy of raising fuel prices whenever it gets a chance. This is because there is no protest against such government policies nowadays," Muhammad added. 

"Why has the government raised the fuel price? In a nutshell, the government has been implementing many development projects which have become a source of corruption and a waste of the taxpayer's money. As a result, it is now trying to make up for the money lost," Muhammad alleged.  

"Where will the government get this money? From the people through prices hikes like these," Muhammad explained.