The government could have avoided the unprecedented hike in the fuel price by checking corruption, theft and mismanagement of Bangladesh Petroleum Corporation and improving the state-run agency’s efficiency, according to the Centre for Policy Dialogue (CPD).
The think-tank made the observations at a press briefing at its Dhanmondi office in the city on Wednesday.
According to the CPD, the price of octane per litre in Bangladesh is Tk 10 higher compared with price in neighbouring India while the price of diesel is higher by Tk 2.
The price of octane is higher by Tk 29 and diesel by Tk 16 compared to Vietnam which is Bangladesh’s biggest competitor in global ready-made garment market.
It also urged the government to revert decision for the fuel price hike saying, the impact of the hike will have a multiplier effect on the economy.
“The fuel price hike will push up the current 7.5 per cent inflation to a further higher level”, said Dr Fahmida Khairun, executive director of the CPD.
She made a presentation tiled: “Could Unprecedented Fuel Price Hike be Avoided Now?”
Former agriculture secretary Anwar Faruque, who spoke at the event, said the cost of rice production would go up by Tk 1,000 per bigha due to the latest fuel price hike. Finally the price of coarse rice would go up to Tk 60 per kg in the coming season, he said.
Taking all these into consideration, the cost of rice production per hectare (1 hectare equal 3.95 bigha) will go up by Tk 4,000, he warned.
Faruque urged the government to announce the paddy procurement price for the next boro season immediately.
“Otherwise, farmers will not feel encouraged to produce rice fearing the loss which will jeopardise the food security,” he told the event.
Energy expert Dr Ijaz Hossain said it will be wise to introduce a formula and adjust the fuel price through the Bangladesh Energy Regulatory Commission (BERC).
The energy regulator is entrusted with the responsibility and the consumers remain prepared to pay higher price when price goes up globally. They will get the benefit of lower price when it comes down, he said.
“If India can adjust fuel price tagging with global market, why can’t Bangladesh do it?,” he asked.
CPD research director Dr Khondaker Golam Moazzem said there is no transparency and accountability of the BPC which has a deposit of over Tk 25,000 crore with different banks.
Despite such a huge deposit, why they need to go to increase the fuel prices when everyone is under an economic pressure due to high inflation,” he asked
BKMEA Vice President Fazle Shamim Ehsan said fuel price would have enormous impact on the industries as it will directly hit the workers’ cost of living.
If they leave their jobs due to the increased cost and go to villages, the industries will suffer the most, he said.
Bangladesh Jatri Kalayan Samity’s Secretary General Mozammel Huque Chowdhury said a passenger’s monthly expense in transport will go up by Tk 2,100-6,000, causing a huge social impact at this moment of high inflation.