The cost of living is rising, while incomes continue to decline. Following a Tk 20-per-liter increase in fuel prices, the prices of essential commodities and transportation fares have risen.
Ordinary consumers are also facing a “double blow” because of excessive or inflated electricity bills.
Due to a shortage of gas in pipelines, the practice of transporting gas in CNG cylinders to keep factories running has increased significantly in various industrial areas across the country.
This has increased both costs and safety risks. Meanwhile, small manufacturing industries are shutting down one after another because of gas shortages and various other crises. As a result, unemployment is rising.
The job market is also sluggish, with few new employment opportunities. Medical and education expenses have risen sharply as well. Overall, many ordinary people are struggling to make ends meet.
After the government raised fuel prices by Tk 20 per liter on Sunday night, the additional burden of expenses has fallen on people from all walks of life.
Those on limited incomes, in particular, have little ability to increase their earnings, and their lives are becoming increasingly difficult. Once, people used to move from villages to cities to overcome financial hardship.
Over time, however, that familiar pattern is changing. Government statistics show that, because expenses have exceeded income, the number of people returning to villages has nearly doubled over the past five years.
It has been reported that, because of low gas pressure in supply lines, owners of many factories in the ready-made garment, textile, ceramics and other sectors are filling cylinders with gas at CNG filling stations to keep production running.
Transporting gas in such unsafe cylinders is prohibited under the Gas Act 2010 and the Gas Distribution Rules 2016. However, the practice has continued openly for a long time. It has increased further amid the recent gas shortage.
Meanwhile, whenever fuel prices rise, demands are made to increase bus fares, and sometimes fares do go up. This has almost become a regular feature of public transportation in the country, particularly buses.
This time has been no exception. On the night of September 20, the government increased the prices of diesel, kerosene, petrol and octane by Tk 20 per liter. Immediately after the price hike, demands emerged for higher public transportation fares.
Even though the government has not announced an increase in bus fares, higher fares are already being charged in some places.
Alif Paribahan operates between Staff Quarter in Demra and Mirpur-10. On Monday evening, passengers on this route were seen being charged an additional Tk 10.
Iqbal Enterprise operates AC buses from Signboard in Narayanganj to Uttara (Abdullahpur) in Dhaka. Fares on these buses increased by Tk 10 to Tk 20 from Monday.
For example, the fare from the Badda Link Road counter to Uttara was previously Tk 90, but passengers were being charged Tk 110 from Monday. The Bangladesh Road Transport Authority (BRTA), however, does not set fares for AC buses.
Owners of AC buses are increasing fares on their own. Shakib, who sells tickets for Iqbal Paribahan at Uttara House Building, said his company instructed them on Monday to increase fares by Tk 20 for all destinations.
The fare was increased by only Tk 10 for trips from Notun Bazar to Uttara or Signboard. Accordingly, we are charging passengers higher fares, he said.
Economists say the adverse effects of the fuel price increase will not be limited to ordinary people; the production costs of industrialists will also rise significantly.
Fares for public transportation and other forms of transport are increasing. The prices of essential commodities have already begun rising since Monday, with the fuel price increase being cited as a reason.
Farmers’ irrigation costs are also certain to rise. Under these circumstances, landlords are unlikely to take long to increase rents as well.
In short, the adverse effects will be felt, to varying degrees, by everyone from the rich to the poor. Economists and businesspeople say the move represents a major shock to people’s cost of living.
It will increase inflation while further reducing people’s purchasing power. Overall, the economy will come under pressure from multiple directions.
The government’s decision will create additional obstacles for the economy. However, they also believe that there was little alternative to raising prices.
Vegetable Prices Rise by Tk 7 per Kilogram; Edible Oil Supply Halted
Following the increase in fuel prices, the prices of several vegetables in the capital’s retail markets have risen by Tk 7 per kilogram.
Most vegetables are now selling for more than Tk 80 per kilogram, while the prices of some vegetables have exceeded Tk 100.
At the same time, edible oil companies are preparing to raise prices in response to the fuel price increase. They have completely stopped supplies.
Private-Sector Investment and Credit Flow at Their Lowest
Investment and credit flow in the private sector have fallen to their lowest levels. As a result, not only are new jobs failing to be created, but existing employees are also becoming difficult to retain.
This is reducing incomes while increasing unemployment, making people’s livelihoods increasingly difficult. The fuel price increase has further compounded their problems. Higher fuel prices have also increased import costs, while shipping costs have risen as well.
Agriculture Sector Feeling the Impact
The agriculture sector is being particularly affected by the fuel price increase. Agricultural blocks and projects dependent on diesel-powered irrigation pumps are already suffering from inadequate irrigation, while the price hike has now placed farmers under even greater financial pressure. Generator operating costs have also increased because of higher fuel prices.
Impact on Electricity Generation
The use of fuel oil in electricity generation in the country has been increasing steadily. As a result, the cost of electricity generation will also rise. Several oil-fired power plants remain in operation, and the sudden price increase will raise their operating costs as well.
Economists say the impact of higher fuel prices will be greatest on economic activities that depend on diesel. Diesel is directly connected to the daily lives of ordinary people and is often referred to as “the fuel of the poor”.
It is used in agriculture, public transportation, goods transportation and almost every sector of the economy. Therefore, an increase in diesel prices will affect everything from transportation expenses to production costs.
Five Million People Becoming Poor Due to Medical Expenses
The situation in the healthcare sector is reportedly the most concerning. It is estimated that around five million people in the country become poor every year because of medical expenses. Many are forced to borrow money or pay for treatment with loans carrying interest. Later, they have to make difficult decisions, such as selling land and other property, to repay those debts.
Even after spending large amounts of money, people often fail to receive the medical care they expect. This further increases their suffering.
Education Costs Rise by 60 Percent
Parents are struggling to cover the cost of their children’s education. When school fees, coaching, private tutoring and books are taken together, expenses have increased by as much as 60–90 percent.
The pressure is particularly severe at the secondary level. As a result, many poor families are being forced to discontinue their children’s education.
According to a private study, nearly half of students currently drop out at some stage of their education, with poverty being a major reason.
According to UNESCO data, average expenditure on education has increased by around 80 percent. Nearly 7 percent of families in the country are even being forced to take loans to send their children to school.
Meanwhile, house rents, commuting costs and other daily expenses have also increased. Private-sector employees, in particular, are facing severe difficulties.
Their salaries have not increased significantly, while the cost burden continues to grow every month. As a result, many are using up their savings to run their households, while others have become increasingly dependent on borrowing.
Meanwhile, the gazette for the Ninth National Pay Scale was recently published. It will be implemented in three phases.
From July 1 through December 31 of the current year, officials in Grade 9 and above will receive 40 percent of the additional basic salary prescribed under the new structure. During the same period, officials and employees in Grades 10 to 20 will receive 50 percent of the additional basic salary.
The increase in salaries for government officials and employees will also have an impact on the market.
