Barely three weeks after imposing higher taxes and duties, the government has raised fuel prices, further exacerbating the financial strain on citizens.
The latest hike, effective from 1 February, contradicts earlier assurances that any such increase would follow public hearings.
Experts and business leaders have criticised the move, warning of its ripple effects on transport costs and consumer goods prices.
Many had hoped that the new administration would alleviate economic pressures rather than intensify them.
Senior researcher Dr Toufique Islam Khan of the Centre for Policy Dialogue (CPD) remarked, "The government promised to raise fuel prices only after public consultation, yet it has followed the same unilateral approach as its predecessor. If such decisions continue, what was the point of a change in leadership?"
He further questioned the rationale behind aligning domestic fuel prices with international markets.
"If rules can be made, they can also be changed for the sake of public relief. But the government has chosen not to do so."
Businesses Brace for Price Surge
Business leaders predict that the increased fuel costs will have a cascading effect on the market.
The former president of the Dhaka Chamber of Commerce and Industry (DCCI), Ashraf Ahmed, explained that every past fuel price hike has led to increased transportation fares.
"This time will be no different—higher transport costs will raise import expenses and inter-district trade costs, ultimately impacting industrial production and consumer prices. This decision has essentially stoked inflation."
Abdul Haque, a former director of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), pointed out the issue of profiteering.
"There are unscrupulous traders who exploit such situations to raise prices beyond necessity. While fuel costs may justify some increase, many will use this as an excuse for excessive price hikes, burdening consumers."
CPD Distinguished Fellow Dr Mustafizur Rahman highlighted the compounding effects of the hike.
"Since the pandemic, costs—both for essentials and non-essentials—have been rising. The Russia-Ukraine war and dollar shortages have worsened the situation. With recent VAT and duty hikes already inflating prices, this new fuel hike will push costs up even further. Unfortunately, the government lacks an effective mechanism to regulate the market."
Government Justifies Move Under IMF Pressure
On 26 January, the Ministry of Energy and Mineral Resources issued a notification raising fuel prices by Tk1 per litre, bringing the new rates to Tk105 per litre for diesel and kerosene, Tk122 for petrol, and Tk126 for octane.
The decision was reportedly influenced by conditions set by the International Monetary Fund (IMF).
The previous administration had agreed to reduce subsidies and periodically raise fuel and electricity prices as part of a $4.7 billion loan agreement with the IMF. This policy saw multiple increases in gas and electricity tariffs.
Following the taka's devaluation since 5 August, import costs for vehicle parts have surged, prompting bus owners to demand higher fares.
The Bangladesh Road Transport Owners Association has formally applied to the Road Transport and Highways Division, seeking approval for fare adjustments.
Bus and Truck Fares Set to Increase
Transport operators have proposed a fare hike of 40 paisa per kilometre for buses.
If approved, fares in Dhaka and Chattogram metropolitan areas will rise to Tk3.38 per kilometre, while intercity and long-haul bus fares will increase to Tk2.96 per kilometre.
Saiful Alam, General Secretary of the Bangladesh Road Transport Owners Association, stated, "We are not solely basing our demand on fuel prices. The dollar exchange rate was Tk102 when fares were last raised; now it stands at around Tk125. Prices of lubricants, spare parts, and tyres have skyrocketed—tyres that once cost Tk25,000–30,000 now cost Tk50,000. Overall, vehicle maintenance expenses have risen by 45 per cent."
Truck owners, too, are pushing for fare hikes. Ramesh Ghosh, president of the Bangladesh Bus-Truck Owners Association, remarked, "Market trends dictate transport fares. A truck that previously operated at Tk10,000 on a long-distance route now demands at least Tk11,000. The reality is, when costs rise across the board, adjustments are inevitable."
Previous Hikes and Public Discontent
In November, diesel prices had surged by 42.5 per cent to Tk114 per litre, while petrol and octane prices soared by over 51 per cent to Tk130 and Tk135 per litre, respectively.
Consequently, bus fares were raised, with city bus rates increasing from Tk1.70 to Tk2.15 per kilometre and minibus fares from Tk1.60 to Tk2.05.
Although fuel prices were later reduced by Tk5 per litre on 29 August, bus operators did not lower fares, intensifying public frustration over transportation costs.
With the latest price increase, inflationary pressures are set to deepen, leaving ordinary citizens bracing for yet another round of economic hardship.
