Age of cheap living is up

When a few hundred transport owners secured deals with the government for a fare hike, additional fuel price was automatically passed on to commuters and the government was relieved of additional subsidy on fuel oils. But for roughly 50 lakh workers in the road and waterway transport sectors, the deals brought nothing. They won't be compensated for three days of net income loss caused by the wildcat strike imposed by the owners.

Nobody is there to say "sorry" to hundreds, maybe even thousands, of admission-seekers and job-seekers who could not appear in enrolment and recruitment tests due to the unwarranted transport strike.

Supply disruption caused by the transport strike pushed up prices of vegetables and fish, but farmers and fishermen will gain nothing from the inflated prices.

The fresh blow came at a time when the industries and businesses started to recover from pandemic shocks, and people, reeling from the second wave of coronavirus infections, were in the hope of getting back jobs and earnings.

The latest study of the Brac Institute of Governance and Development (BIGD) and the Power and Participation Research Center (PPRC) shows how tough life is for low-income people after the second wave of the Covid-19 pandemic. These people now earn 23% less than what they had earned before the pandemic.

Prior to the pandemic in February 2020, daily income of vulnerable non-poor people, on an average, was Tk114, which was Tk88 in August this year.

But expenditure soared, forcing low-income families in cities to cut food spending by 17%. From March to August this year, the number of people skipping one meal in a day has gone up four times, the survey revealed.

Of the people surveyed, 10% have not yet found a job since the pandemic left them unemployed, while 69% are not happy with whatever work they managed to get.

Hiking fare by Tk0.45 per kilometre may sound trivial, but its multiplying impacts come as a burden on burden for people, already hard-pressed with soaring cost of living.

Even during the pandemic in 2020, the cost of living in Bangladesh rose 6.88% as prices of goods and services went up due to supply disruptions when incomes dropped, the Consumers Association of Bangladesh (CAB) said in June.

The price rally continued due to global price volatility.

Fuel price hike has come as an added domestic factor with cascading impacts on the cost of living.

Prices of almost everything of daily needs – from lentils to sugar to edible oil – have gone up. The government raised the price of cooking gas in cylinders. Lastly, the prices of diesel and kerosene were raised, which led to a hike in bus fares and would add to irrigation costs for farmers. Roughly 1% of the population, who are out of electricity coverage in official count, are subject to spend Tk15 per litre more on kerosene to light their lamps.

Life is not an easy-going thing for middle-income people. School reopening has come with additional expenditures which the families could skip during the pandemic-induced closure. Food prices have gone up, now extra bus and launch fares would add to non-food costs.

Truckers are on a separate movement to get their fares hiked, which will directly increase the prices of all goods further. Prices of imported goods have already skyrocketed mainly due to global supply chain disruptions, now truck and covered-van owners have added a local version of the problem. Truck strike is not only disrupting local market supplies, but also causing huge losses to export-import trade at a time when exporters are struggling to meet festival season deadlines in Europe and the USA.

The BPC, the state-owned fuel oil monopoly, took a shortcut, and the BRTA and the BIWTA –regulators for road and water transports – completed the process, helping the transport owners and making commuters pay extra for bus and launch fares. Truck owners, who are still on strike, will do it on their own as there is none to fix their fare of goods transportation and this will pass the cost on to the consumers across the country.

Bangladesh's Tk6.03 trillion budget should have a provision to shield its people against global price shocks – at least for fuel oil price. That could come as a direct cash subsidy to farmers using diesel in irrigation pumps or those in the Urirchar island who do not have electricity coverage and use kerosene in lamps. Transport owners can be offered some rebate in corporate tax or bank interest subsidy to help them absorb the fuel price hike.

What would have been easier was to cut the government's taxes and duties on fuel oil – which account for 30% of the fuel price, Tk24 in case of diesel and kerosene now priced at Tk80. The day the Bangladesh Petroleum Corporation hiked diesel and kerosene prices by Tk15 per litre, India's central government and states cut excise duty and VAT, relieving the cost burden of Tk17-24 per litre.