Impact of Fuel Price Hike: Living now even harsher for poor

No one knows how the poor man dines, says a Russian proverb that now seems all too fitting in light of the government's decision to hike the prices of diesel, kerosene and liquefied petroleum gas. 

Fuel prices feed into the prices of other goods and services, meaning the energy ministry's move will have an extensive impact on the cost of living and consumption of the poor and the middle-classes, who are still reeling from the blow dealt by the pandemic and already combatting inflation.

One such person is Billal Hossain, whose livelihood is dependent on kerosene.

The stove in which he churns out gallons of tea at his makeshift stall in the capital's Mirpur each day is fuelled by kerosene, and a Tk 15 hike in each litre of the fuel from yesterday means his overhead has shot through the roof.

Unfortunately, he cannot pass on the surge in overheads to his customers, who are charged Tk 5 for a cup of tea.

"Will anyone come to my stall if I charge Tk 10 from today? Do the government ever think of low-income people like us?" asked Hossain, who is still paying off the loan he took to make ends meet during the pandemic lull.

If the price of the cup of tea that the ordinary citizens enjoy by the roadside does not go up, the prices of rice and other crops will definitely surge.

In Bangladesh, almost all the ploughing and irrigation are mechanised and powered by diesel, whose price has gone up by Tk 15 a litre too to Tk 80 from yesterday.

So, the production cost of dry season crop boro, which makes up more than half of the country's total rice production, will increase by about 15 percent and will most definitely be passed on to consumers.

And transporting the rice and other produce from the farms to the markets will become costlier: the trucks and covered vans used to haul goods run on diesel.

About 72 percent of the 40 lakh tonnes of diesel consumed annually is by the transport sector.

Other than the fares for trucks, the tickets for buses, the mode of transport for the poor and the middle-classes, will rise.

In short, the government's decision will have a far-reaching impact on the lives of those who cannot afford to -- and it is all to arrest daily losses of about Tk 20 crore of a state-run corporation that logged in profits of Tk 43,136 crore between fiscals 2014-15 and 2020-21.

Rubbing salt into the wounds of the poor and the middle-classes are the Bangladesh Energy Regulatory Commission's move yesterday to increase the price of LPG for the fifth time since April to keep up with the prices in the international market.

A 12 kg cylinder, the most common form for marketing the fuel, is now selling for Tk 1,313, up by Tk 54.

The three-pronged price hike of fuel will unreservedly fan the flames of inflation.

In September, which is the latest available data, inflation rose for the third consecutive month to 5.59 percent.

"This is not desirable at this time," said Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue.

The prices of gas and electricity have already been increased in phases, while the prices of essential commodities are at an elevated level, said SM Nazer Hossain, vice-president of the Consumers Association of Bangladesh, adding that inflation is on the rise.

Against the backdrop, the hike in the prices of kerosene and diesel will break the lower-income people.

Subsequently, he urged the government to retract its decision.

The prices of petroleum were low in the international market for a long time, but the government did not cut the domestic prices then to benefit the commoners, Hossain said.

Moazzem suggested the government provide a subsidy to the BPC, which last logged in a loss -- of Tk 2,321 crore -- back in fiscal 2013-14, instead of raising the prices.

Jahangir Alam, an agricultural economist, called for cash subsidy to farmers for irrigation to keep their production costs within a reasonable level.

"We have instances of farmers getting cash subsidy," he said, citing the Tk 800 farmers got in 2009-10.

And the government should declare subsidy before the beginning of the Boro season.

Farmers start taking preparations to grow Boro in November-December, so they will not feel discouraged to cultivate the crop if the government declares a subsidy for the diesel used, said Abdul Latif Mondal, a former food secretary.

Meanwhile, the Bangladesh Truck Covered Tank Lorry Prime Movers Owners and Workers Coordination Council have called a countrywide indefinite strike from 6:00 am today.

The transport owners incurred huge losses due to the pandemic, said Rustam Ali Khan, convener of the organisation.

Just as they were recovering the losses, the government raised the toll for the two biggest bridges.

"And now, the fuel price has been hiked without any discussion with the transport owners. We will continue the strike until the government changes its decision," he added.

A leader of the Bangladesh Bus Truck Owners Association, another major organisation of transport owners, also said the operations of all transport would remain suspended from today.

Although a strike was not called from the centre, the branches in districts decided not to operate transport from today protesting the fuel price hike, said Jatiya Party lawmaker Mashiur Rahman Ranga, also the president of the Bangladesh Road Transport Owners Association.

The association also wrote to the secretary of Road Transport and Highway Division and chairman of the Bangladesh Road Transport Authority (BRTA) to re-fix the bus fare following the fuel price hike.

While the government did not hike the bus fare in the last eight years, the cost of all parts of vehicles, as well as the taxes, have increased manifold, said Khondaker Enayet Ullah, the secretary-general of the association, in his written application.

Then the pandemic-induced lockdown hit the transport business hard, so it would not be possible to operate buses unless the fare is increased, Enayet added.

Contacted, BRTA Chairman Nur Mohammad Mazumder said a meeting would be held over the issues with the association on Sunday.

However, many buses and launches have already raised the fare.

Al Kachir, who works at a private firm, said a bus service on the Dhaka-Narayanganj route increased the fare to Tk 50 from Tk 36.

Our Khulna correspondent also reported fare hikes.

The launch owners in different areas have already increased fares although their central association did not make any decision in this regard, said Badiuzzaman Badal, senior vice-chairman of the Bangladesh Inland Waterways (passenger carrier) Association.

A meeting would be held today over the issue and the Bangladesh Inland Water Transport Authority called a meeting on Monday over re-fixing launch fares, Badal added.

Meanwhile, the Bangladesh Noujan Shramik Federation urged the government to reconsider the decision.