A hike in fuel prices now will be too much to bear

It's worrying to learn that the government is considering the possibility of a hike in fuel prices to address the "losses being suffered" by Bangladesh Petroleum Corporation (BPC) after the prices of crude oil and diesel have gone up in the global market. As the economic fallout of the Ukraine invasion by Russia continues to be felt around the world, two cabinet ministers, including the finance minister and the state minister for power, energy and mineral resources, recently hinted at a fuel price hike. We need to take this seriously and brace for the evolving situation.

The possible move comes about seven months after the government increased the diesel price by Tk 15 a litre in November last year. Earlier, in January 2013, the petrol price was raised by Tk 7 to Tk 96 a litre, and the octane price by Tk 5 to Tk 99 a litre. However, the prices of both fuels were slashed by Tk 10 a litre in April 2016. One may recall that when the government raised the diesel price in November, transport owners and workers organised a three-day nationwide strike leaving people stranded on the roads and highways. It would be difficult to predict how the transport groups might react if the price is increased so soon, that too in the midst of a volatile market situation.

In the latest instance, while the finance minister stopped short of announcing a hike, he did make it a point to mention that when the cost goes up excessively, the government has to adjust by increasing the price at the consumer level. This implies that the fuel price is about to go up soon, which will be unreasonable because the BPC has reportedly made profits of about Tk 50,000 crore since 2015. This being the case, there can be no justification for increasing fuel prices in the name of addressing the BPC's loss, or for shifting the burden of said loss onto the shoulders of the ordinary people.

As things stand, ordinary people are already finding it extremely difficult to make ends meet with the kitchen markets behaving erratically and the high prices of almost all daily essentials showing no signs of easing. A further escalation of fuel prices – along with the already-high prices of utilities like electricity, water and gas – are bound to have a ripple effect on the prices of food and non-food items. This will be too much to bear for fixed-income groups, especially those in the lower-income bracket. We urge the government to explore alternatives to raising fuel prices and overcharging an already over-taxed people. They deserve a breathing space in this crazy time.