2 months ago

It's time to make a move

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Most national dailies have been carrying reports on the unabated hike in prices of essentials for the past few months. Indeed, the rate of price increase for a few items--- poultry birds and red meat and fish in particular---has been astronomical. Consumers have meanwhile resigned to their fate. The authorities concerned have played their roles as onlookers and allowed the so-called market forces to play their parts.

With the price situation turning grimmer, the queues before the sales points, mobile or otherwise, belonging to the Trading Corporation of Bangladesh (TCB) and the Food Directorate have not only become longer but also unmanageable. Before the Covid-19 pandemic, few people used to purchase food items from the OMS points, as they found spending time in queues not financially rewarding. But the situation changed almost overnight as the pandemic rendered many unemployed and deprived millions of regular income sources. Alongside poor and low-income people, middle-class people thus started crowding these sales points. Many female members of this class often get involved in scuffles to secure a place in queues. Some of them wear burqas or hijabs to escape the notice of friends, neighbours and relatives.

From the outside, it is difficult to fathom the level of desperation of the poor, low and fixed-income sections of the population. The situation looks normal with city streets remaining clogged with vehicles of all types and marketplaces with shoppers. The supply of goods is also abundant. But shopkeepers have a different story to tell and that is about the declining daily turnover. As the prices of most items have gone through the roof, consumers are buying less much to the distaste of sellers of goods and services. Of course, the affluent class of people has as usual remained unscathed by the price rise.

People affected by the continuous rise in the prices of essentials have concluded that all the relevant government agencies are helpless or reluctant to come to their rescue under the given circumstances.

The government, however, might consider doing one favour. It can bring down the fuel prices in line with the current prices of oil and gas in the international market. Such a step will also be a logical one.

When the oil prices peaked in the wake of the Russian invasion of Ukraine, the government raised the prices of petroleum products by a record margin. Such an increase in one go had a huge impact on the prices of most commodities. The dollar crunch that had come later added fuel to the blazing price rise. The dollar crisis also forced the government to discourage imports, and that made imported goods pricier.

The government is unlikely to relax the restrictions on imports soon, as the greenback supply situation has not improved up to the expected level. The restrictions on imports have also created price instability for locally produced goods.

The government, as per the agreement reached with the International Monetary Fund (IMF), will have to introduce an automated pricing mechanism for petroleum products soon. Under such a mechanism, petroleum prices move up or down in line with their international prices. Experts have been suggesting the introduction of such a mechanism for a long time, but the government has preferred the ongoing pricing system since it helps the Bangladesh Petroleum Corporation (BPC) earn a hefty profit, which, finally flows into the state coffer at the cost of consumers.

Automated pricing, if introduced now, would deprive the government of some amount of revenue, but it is likely to leave a soothing effect on the price situation and the rate of inflation which is nearing the double-digit mark.


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