Why fuel inflation!

It has now become customary on the part of businesspeople to do some dress rehearsal before they stage the final act or coup de grace on the occasion of the holy month of Ramadan. Market volatility now far outstripping the economic recovery for the majority of people has already dealt a telling blow. Particularly the unrelenting price hike of the bare minimum essentials required for human survival has pushed them on to the edge. The food minister's warning against raising staple price by manipulative means has proved an empty threat. Refiners of edible or cooking oil have defied the decision taken by the commerce minister at a meeting with their association on January 19 not to increase price of the commodity before February 6. Soon after the meeting, they raised prices of bottled or loose cooking oil ---both soybean and palm --- by Tk 8.0-10 a litre. Sugar has long been dearer and within a week its price has shot up to Tk80-85 a kilogram from Tk 74-75.

Remarkably, the commodities that have greater demands during the holy month are targeted for exorbitant price hikes. The consumers may be spared economic bleeding on account of onion because it is the harvesting time of this tuber crop. The most popular variety of pulse or lentil Masur had more than 20 per cent price hike a month back. Chickpea, the demand of which goes up during Ramadan, has reportedly started becoming dearer. If the market of ingredients of iftar (with which fast is broken) items become so jittery well before two months, what will be the limit to their upward fluctuation is beyond anybody's guess. True, cooking oil, 90 per cent of which has to be imported, has registered hikes in the international market but traders would not wait for effecting price increase on their old stock. If the price goes down in international market, they are not at all prompt to follow suit.

What is particularly galling is that even the winter vegetables which have abundant supply and naturally become cheaper than any other time are unusually expensive. So the low-income and middle class people find themselves in an excruciating travail. Sure enough, the government is reluctant to interfere in the market. But it is responsible for triggering the all-round price hikes. Right from the time the government decided to increase fuel oils, manufacturers and traders of different business segments started hiking prices one after another on the plea that production and transportation costs have gone up.

Now different utility-service agencies such as Titas, Dhaka Water Supply and Sewerage Authority (DWASA) and Bangladesh Power Development Board are itching for raising prices of gas and electricity. If this happens it will be the last straw on the camel's back. Before going for such raises, it would be wise to stop pilferage of gas and power in the name of system loss. As for minimising, if not bringing an end to, the monopoly of business syndicates, the best option is either to press into service a fleet of government trucks and wagons or making available the former type of vehicles to farmers. This can be done by organising their cooperatives with the opportunity of owning those through payment in instalments.