Cheaper prices of fuel
IT is good to note that the government has reduced the prices of fuel further, the second time in the last two months. Howsoever slender the decrease maybe, it has come at a time when the next cropping season is round the corner. We hope that the farmers would be benifitted from the reduced cost of a very important input of cultivation.
One feels though, the size of reduction could be bigger. One would have thought that the decision makers would have kept in view not only the increase in petroleum prices in the country the last time in July this year, of around 35 percent on average, but also the huge fall of prices of petroleum in the international market, since then, but particularly over the last two months, which allowed room for a further decrease.
However, the redeeming feature in this case is the fact that unlike in the past, where prices in Bangladesh have always suffered from a ratchet effect, once the price of a commodity went up it never came down, we see a reduction in fuel prices. It is also heartening to see that for the first time the government does not have to give subsidy on fuel.
That said, it is quite one thing to reduce the price of fuel and quite another to ensure that the benefits are reflected in the prices of other commodities, particularly the essential ones like food. In this respect, our experience has been rather dismaying. In the past no sooner had the prices of various grades of fuel been increased than we saw an immediate, and sometimes irrational, increase in prices of the other commodities.
We suffered from what is commonly known as imported inflation and this came in handy for government to explain higher prices and be resigned to the phenomenon.
Contrary to expectations, we did not see a corresponding decrease in prices, either in food or transport fares, when fuel prices were reduced the first time in October this year. It would be our hope that the administration having decided to bring down the cost of petroleum, would also see to it that benefits of such a reduction are reflected in the prices of other essential commodities.
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