Traders raise oil price defying govt order

As the saying goes, old habits die hard. This is particularly true for market manipulators in Bangladesh, who have once again resorted to their familiar tactic of creating artificial crises to drive up the prices of essential commodities such as edible oil and onions.

In a move that reflects brazen contempt for the law and utter disregard for public welfare, the edible oil traders' association has unilaterally increased the price of edible oil by Tk 6-9 per litre. This decision directly contradicts a government directive and violates the legal framework designed to protect consumers from arbitrary price hikes.

Similarly, onion prices rose by Tk 20-30 per kilogram within a week, although supply remains stable in most city markets. Now, onions are being sold at a price of Tk120 to 140 per kilogram, even though new onions have started arriving in the market.

Under the Essential Commodities Marketing and Distributor Appointment Order, 2011, the Ministry of Commerce is responsible for regulating the prices of essential goods, including edible oil. The law requires traders to obtain prior approval before raising prices. Although the traders reportedly sought approval, the ministry rejected their proposal on the grounds that no valid reason existed for a price increase. Nevertheless, the traders went ahead and raised the price by creating an artificial shortage of edible oil in the market.

 This carefully engineered scarcity appears designed to pressure the government into accepting an unjustified increase in edible oil prices. Such tactics served unscrupulous business syndicates well under the previous Awami League government. Since the formation of the interim government, the edible oil traders' association has attempted to raise prices several times using the same manipulative tactics.

The traders' unilateral action constitutes a clear violation of the law. The legal framework is not symbolic; it contains robust mechanisms to address such misconduct. The Competition Act and the Consumer Rights Protection Act give the government adequate tools to act against hoarding, creating cartels and other unfair market practices. The commerce adviser has warned of taking action against edible oil refiners. The public expects not only promises, but firm action against the delinquent trade syndicates.
That said, one of the major challenges to keeping edible price stable is the oligopolistic structure of the market that flourished during the previous government. A small group of companies still dominates the import of essential food items, limiting competition and allowing traders to manipulate supply and prices. Breaking this oligopoly is essential to ensure fair competition and protect consumers. 

Addressing the current volatility in the edible oil market requires urgent and focused government intervention, while a long-term strategy is equally essential to tackle the systemic problems that continue to destabilise this sector. If traditional measures such as routine meetings with traders and market monitoring fail to bring stability, the government must consider more decisive steps. One option is to establish a substantial national stockpile of edible oil. Such a reserve could be strategically released into the market before Ramadan through the Trading Corporation of Bangladesh (TCB) to counter artificial shortages and stabilise prices.

Another critical long-term priority is increasing domestic edible oil production. The country currently produces only about 0.25 million tonnes of edible oil against an annual demand of around 2.4 million tonnes. Increasing domestic production capacity is essential to reduce import dependency and curb arbitrary price hikes influenced by both global market volatility and local traders.

The interim government now faces a crucial test to restore fairness in the market, protect consumer rights and demonstrate that profiteering at the expense of the public will no longer be tolerated.

aktuhin.fexpress@gmail.com