A Tk 5 cut in fuel prices will not ease people’s pain in Bangladesh

Less than a month after the highest increase in fuel prices in Bangladesh since independence, the government has done what experts and ordinary people have been demanding: it revised fuel prices. On 29 August 2022 the government of Bangladesh reduced fuel prices by only Tk 5 per litre. The price of diesel and kerosene was reduced to Tk 109 per liter from Tk 114 set on August 5.

Notably, just a day after the National Board of Revenue (NBR) cut import duties on diesel by 11.25% to reduce import costs. Economists and energy experts are recommending lower import duties to lower prices after an unprecedented hike in fuel prices, rather than shift the burden to end consumers who are already struggling to make ends meet in an increasingly volatile economy. But unfortunately, we don’t expect consumers to benefit from this decision. Prices of essentials rose sharply, with prices for inaugural flights up 30%, long-distance bus fares up 22% and city routes up 16.3%. Can we expect the price of any product to drop due to Tk 5 drop in fuel prices? The answer is no.

Economists and energy experts have offered sage advice over the past few weeks on how to deal with rising fuel prices. First, Bangladesh Petroleum Corporation (BPC), which has lost Tk 80,145.1 crore in the past six months, can use the profit of Tk 468.58 crore it has made since 2015. The government only collects revenue in 2020 and 2021, except for VAT and other taxes. Where has all the money gone? Despite repeated calls for greater transparency, the government has yet to release details.Both ordinary people and businesses are already struggling with the inflationary pressure on the economy brought on by the first round of fuel price hikes last November. The latest rise in fuel prices has sent them into panic. For the benefit of all, including the economy, we call on the government to reconsider its anti-people fuel hikes and adjust prices so they can sit back and relax.