Another nail in the coffin

Mahmudur Rahman | Published: December 12, 2018 20:54:04

That consumer convenience goes for a toss is nothing new. Be it in adulterated food, dead poultry and foal in restaurants, over-billing and lack of connectivity and shortfall in utilities or rank bad quality inputs in finished products the hapless consumer has seen it all. We were told Compressed Natural Gas (CNG) was the answer to dodgy air pollution not to mention cheaper fuel for vehicles. The fairy tale has ended. CNG is partly put to blame for extreme gas availability; whenever it is available, CNG pumps are shut for six hours so that the mineral can be ploughed to homes and industries. Great planning that!

We are now told there isn't enough gas to go round and so imported fuel must be brought in to fuel transport engines and expensive but beneficial quick power plants. No matter what the international power prices are ours was reduced at an all-time international low and remains so whenever it changes. The development partner called the World Bank has been anxious to dismiss this subsidy by tagging local consumer prices with changes in world fuel prices. After years of subsidies the government chose holding prices to make up the deficit before lowering prices.

With a growing impasse threatening the unity of OPEC (Organisation of the Petroleum Exporting Countries), Qatar having pulled out effective next January, Saudi Arabia is in talks with non-OPEC Russia to step back output so as to keep prices stable. No doubt a price to pay for the Khashoggi debacle agreed with the United States. The US continues extracting shoal oil in ensuring prices remain down but it can't do so on its own. Even with prices down it'll still be of concern for Bangladesh. The upshot? No likelihood of reduction in oil prices, especially given the value of the US dollar running supreme against a weakening sterling. Most of the OPEC countries are victims to a carefully engineered economic drought and may have little option but to keep prices down. The harm done to their economies is akin to the Bangladesh consumer, an additional twist of the noose.

And so the latest dumping of bitter medicine is Liquefied Petroleum Gas (LNG), a more expensive proposition to CNG, fully imported - meaning a further drain on foreign exchange and a whole clatter of reconversion of cars and vehicles. Somewhere someone forgot that nationalisation is beneficial in some respects. The 700,000 tonnes LNG market is fully in the hands of a cartel and though only 35 penetration has been achieved, prices have already jumped from Tk 1000 to Tk 1200 in a small passage of time. This is more expensive than gas or CNG and another massive burden on the ever suffering consumer. Yet it could have been controlled. The government is better as a facility, rather than a regulator but when cartels are formed it needs to be a tad more rigid.

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