In a market already under pressure from rising prices of essential commodities, the increase in fuel prices has raised fresh concerns about further price hikes. So far, the direct impact has not been reflected in the prices of most goods.
However, businesses and consumers fear that prices of essential commodities could rise further if transportation and supply costs increase.
Meanwhile, within just one day of fuel prices being raised by Tk 20 per litre, public transport fares increased on various routes in and around the capital. At the same time, there have been complaints of higher fares being demanded for goods transportation and ride-sharing services.
Regular commuters have been placed under severe financial pressure by the sudden fare increases. Reports have also emerged of unpleasant incidents involving customers in various areas outside Dhaka.
Before the increased fuel prices came into effect at midnight, several filling stations had already reduced supplies to customers. As a result, there were even incidents of physical altercations between customers who came to buy fuel and filling-station employees.
A visit to Dhaka's retail and wholesale markets on Monday found that, so far, there has been no change in commodity prices due to the increase in fuel prices.
However, if the cost of transporting goods rises, the prices of some products may increase in the coming days. Retailers said that they purchase goods from wholesale markets at a certain price, and if transportation costs increase, those additional costs are ultimately added to the prices of the goods.
However, it is not yet possible to say which products will become more expensive or by how much.
The impact has already begun to be felt in passenger transport. On buses and human haulers operating from entry points to the capital—including Chittagong Road, Signboard, Jatrabari and Sayedabad—passengers are being charged an additional Tk 5 to Tk 10, depending on the route. Long-distance routes have also been affected. Passengers said fares on buses from Sayedabad to Khulna, Barishal, Shariatpur and Madaripur have increased by as much as Tk 50, while fares on local buses to Chattogram have risen by as much as Tk 100.
The sudden fare increases have placed ordinary people who commute to work every day under additional financial pressure. They fear their monthly transportation expenses will increase significantly. Passengers said that, in addition to public transport, ride-sharing drivers are also demanding higher fares because of increased fuel costs. However, this has raised concerns that they may lose passengers. Meanwhile, truck and pickup drivers have also said that freight transportation charges are being increased. It should be noted that fuel prices were increased by Tk 20 per litre from midnight on Monday. Since then, higher fares have begun to be charged for both passenger and goods transportation.
“There was no alternative to adjusting prices”: State Minister for Energy
State Minister for Power, Energy and Mineral Resources Anindya Islam Amit said fuel prices had to be increased in Bangladesh because international fuel prices have continued to rise due to the crisis in the Middle East. He said, “The Middle East crisis is taking on a new dimension every day. Oil prices are rising, and shipping costs are increasing. At this moment, there was no alternative to adjusting fuel prices.”
State Minister Anindya Islam Amit spoke to journalists at the Secretariat on Monday about the fuel price increase. He said the government would not want to take—or would not take—such an unpopular decision unless it had no other option.
The state minister said the government had incurred losses of Tk 22,875 crore from March to August. Because fuel prices were not adjusted in line with international market prices, the government had been incurring losses of Tk 3,813 crore per month. He said that, as a political worker, he understood the hardship ordinary people would face as a result of the fuel price increase and therefore apologized to the people.
Anindya Islam Amit said Bangladesh has to import around 7 million tonnes of fuel annually, of which 4.5 million tonnes are diesel. The average international price of diesel is Tk 205 per litre. Before this latest adjustment, diesel was being sold domestically at Tk 115 per litre. Even after the price adjustment, the government is incurring a loss of Tk 70 per litre. Previously, the loss had been Tk 90 per litre. Without a price adjustment, the annual loss on diesel alone would have reached Tk 40,000 crore. Including all types of fuel, the loss would have been Tk 50,000 crore.
Noting that continuing fuel subsidies could severely disrupt social safety-net programs, the state minister said the government wants to bring low-income families under the family-card program. He said the government had been forced to take a decision such as raising fuel prices because there was no viable alternative. He expressed hope that the people would understand the situation.
The state minister said the price of diesel in Kolkata, India, is Tk 134 per litre, while it is Tk 164 in Myanmar, Tk 161 in Nepal, Tk 179 in Sri Lanka, Tk 151 in Thailand and Tk 137 in Vietnam. Bangladesh had the lowest fuel prices among these countries. This had created a significant risk of fuel being smuggled into neighboring countries. He said the government therefore had to adjust fuel prices to prevent fuel from being smuggled to neighboring countries. He expressed hope that the people would understand the rationale. He added that the prime minister had instructed all relevant ministries to ensure that the impact of the price increase remains at a tolerable level.
BRTA proposes 20 paisa per km increase for intercity buses and 18 paisa for city buses
Against the backdrop of the fuel price increase, the Bangladesh Road Transport Authority (BRTA) has taken steps to revise bus fares. The agency has recommended increasing fares by 20 paisa per kilometre for long-distance buses and by 18 paisa per kilometre for city-service buses. However, considering passengers' interests, it has proposed keeping the minimum fare unchanged at Tk 10 for buses and Tk 8 for minibuses. The recommendation was made at a meeting of the fare-adjustment committee held Monday at the BRTA's Banani office. According to sources familiar with the matter, the committee considered not only the higher fuel prices but also other operating costs of buses.
The BRTA's recommendation will now be sent to the government for final approval. The Ministry of Road Transport and Bridges will make the decision. Sources said a notification announcing the fare increase could be issued by Tuesday. However, the proposed new fares will not take effect until the notification is issued.
Under the proposed new fare structure, the rate for long-distance buses would increase from the current Tk 2.23 per kilometre to Tk 2.43 per kilometre. For city buses in Dhaka and Chattogram metropolitan areas, the proposed fare would rise from Tk 2.53 to Tk 2.73 per kilometre. For minibuses operating within the Dhaka Transport Coordination Authority (DTCA) area, the recommended fare would increase from Tk 2.32 to Tk 2.52 per kilometre.