Famine is not here, but record fuel price hike shows economy has fallen into an abyss07 August 2022 Editorial Desk
Though from the government it was said earlier that it would not reduce subsidies on certain commodities such as fuel and fertiliser, now the economic pressure has become so unprecedentedly huge that it was forced to raise first the price of urea fertiliser and after several days, from Friday midnight, all of a sudden it also hiked the fuel price, that also by margins that was done never before.
The price of diesel per litre has been raised from Tk 80 to Tk 114 (42.5%), of kerosene from Tk 80 to Tk 114 (42.5%), petrol from Tk 86 to Tk 130 (51.1%) and octane from Tk 89 to Tk 135 (51.75%). The impact of the decision was immediate with road transport owners taking off the buses from the streets and a cross section of people staging protests across the country. Petrol pumps stopped selling fuel. Commuting in the capital came to a virtual halt yesterday. Until the road transport fare is settled anew, nothing will be normal on the road.
Ten days before the Ukraine war started on Feb 24, Agriculture Minister Mohammad Abdur Razzak had declared that under any circumstances the fertiliser price would not be increased. The minister could not keep his word. On Feb 27 the finance minister also said the government has yet to take any decision on subsidies for inflation management. Now as Bangladesh's economy has been deteriorating fast with the steep fall of dollar reserves in Bangladesh Bank, it was forced to ask for an IMF loan to the tune of $4.5 billion. To meet the preconditions of loan, the government has increased the fuel and fertiliser prices so that it can achieve the ability of loan repayment.
The ripple effect of these hikes would be huge on the price of other commodities that would create even more new poor in the country, because people in general are earning less but spending more at present, such has become the bites of inflation. With fertiliser and fuel price hikes, the increased agricultural production cost will push the prices of food items including rice and wheat to go up on the one hand, and due to increase in the transportation cost, prices of all daily essentials will also shoot up inevitably even further on the other hand. It will now be a double whammy situation!
People in Bangladesh were expecting that after the UN-backed deal signed between Ukraine and Russia food prices would ease in the local market as it has been in other countries of the world, but now it is not going to be so in Bangladesh. The matter will certainly be even worse with commodity prices jumping even further.
As a result of this depressing economic scenario, incidents of robbery and theft have increased in society.
Rampant corruption and reckless looting of banks by the government supporters along with disbursement of huge loans never to be repaid as well as unlimited waste of money in ceremonious jubilations made the government a fabulous liar about the economic miracle and prosperity. The moment of truth is catching up with the government for not caring about the people's misery and joblessness.
The ministers and government officials will not be affected by the high jump in prices of petrol or diesel because they get these free at public cost.
Bangladesh may not be heading for a famine like situation right now, but they are bearing the brunt of the present hopeless economic scenario with no fault of their own.