The Financial Express

The hike in diesel price and its impact

| Updated: November 08, 2021 22:06:04

The hike in diesel price and its impact

The government Wednesday night hiked the prices of diesel and kerosene by 23 per cent to Tk 80 a litre. The next day, buses plying some city routes and beyond raised their fares by 40 per cent without any prior announcement and approval from the Bangladesh Road Transport Authority (BRTA). As a natural outburst, a section of passengers refused to pay the increased fares and got involved in a war of words with transport workers. Something more ominous, however, was in store for the people.

Trucks and covered vans stopped operations Friday morning according to a pre-announced countrywide protest programme. Passenger buses too were off the streets on the day. The central leadership of the bus owners expressed their ignorance of the strike and passed the responsibility on to the district-level bus owners. Any hike in fuel oil prices triggered such an immediate response from the transport owners in the past. Usually, the transport owners, as part of their strategy, first protest the fuel price hike and then demand a hike in their fares. In the event of failure to get their demands fulfilled, they announce a strike- programme to put pressure on the government.  

The sudden transport strike caused temporary disruptions to the movement of people and goods across the country. Thousands of jobs seekers faced trouble in reaching the examination centres in Dhaka on Friday in the absence of public buses. Prices of a few essentials, including vegetables, went up during the last two days in city markets due to supply disruptions. Consumers have been going through a tough time as most essentials are pricier now than any time in the recent past. The cascading effect of the hike in diesel oil price will be on almost everything, starting from farm produce down to industrial goods.

The transport strike is a temporary development. The owners will call off in a day or two following negotiations with the government. But, poor consumers will have to bear the main brunt of the rise in diesel and kerosene oil. The poor and low-income families, who have suffered most during the Covid time, would be the prime victims. Many have lost jobs or got a substantial cut in their income. Though businesses are returning to normal gradually, the income level of these people has not. Any further deterioration in the price situation would only make their living harder.

Questions are being asked whether the government could avoid a big jump in diesel price. The Bangladesh Petroleum Corporation, the state marketing company of petroleum products, reportedly, has made a hefty profit for the past few years, particularly during the pandemic time when oil prices nosedived. The government, instead of passing the benefit of the low price on to the consumers, reportedly earned over Tk 500 billion in profits and tax revenues from petroleum product marketing.

The government could have offered some relief to consumers the way neighbouring India has offered. India, instead of raising the oil prices, on Wednesday last reduced the same by cutting duties and taxes on fuel oils. It, however, needs to be noted that the prices of petroleum products, including diesel, have been higher in India than those in Bangladesh. That, however, should not influence the decision-making here. The government should reconsider the latest hike in fuel oil prices in a proper perspective.  

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