Far-reaching consequences of fuel price hike

The rise of diesel and kerosene prices will impact the living of the commoners directly affecting the agriculture and export sector.

Experts think, apart from increasing price of goods, other expenditure of daily life will also increase with the time being.

A big hit to agriculture

The agriculture sector needs more than 21 percent of fuel oil of the total demand. Of them, the irrigation process requires a big share. Besides, diesel is used in plowing lands and threshing and transporting crops. As many as 9 lakh 72 thousand 539 tonnes of diesel oil was used in the agriculture sector in the 2020-21 fiscal year which is 21.15 percent of the total.

 As per the previous diesel price the total cost of the fiscal was taka 7 thousand 586 crore while the budget was estimated to taka 10 thousand 560 crore according to the new price of taka 80 per litre. It means a total of taka 3 thousand crore expenditure will increase this year.

Energy expert and Consumers Association of Bangladesh (CAB) energy advisor Dr. M Shamsul Alam said, if the fuel is hiked, price of all goods and services will increase. The overall expenditure of living will go up. Production cost and marketing charge will soar. 

Expansion of export cost

Apart from public transport fare of freight vehicles was also increased by 40 percent. Traders fear, the export sector will need subsidies in near future. 

Bangladesh Garments Manufacturers and Exporters Association (BGMEA) president Faruk Hasan said, “The export sector has been experiencing competition. If the expenditure increases, we might lose the buyers. To attract them, we deducted the price. But if we continue to subsidise the sector, it will stand on the brink of collapse.”

Transport cost increase

Due to the increase of fuel oil price, commuters have to pay taka 15 to 20 on an average every day. About 30 lakh people commute every day in Dhaka city alone resulting in an additional expense of taka 6 crore per day.

According to the data of the Department of Agricultural Expansion, there are about 13 lakh 40 thousand diesel-run pumps in the country while 2 lakh 70 thousand pumps are run electricity. 10-16 tonnes of diesel are used every year in irrigation.

A DAE official said, the government has initiated process to formulate a special task force to resolve the fertilizer and diesel crisis in the present season. The authorities have adequate stock of the two ingredients in farming. Surveillance has been beefed up in the border to stem trafficking.