Editorial
CNG price hike
Address the fallout effectively
THE government has raised the price of the compressed natural gas (CNG). Reasons being cited for the hike is to reduce the di parity between the prices consumers pay for other fuels and that being incurred in case of CNG use. The second argument is to increase revenues for developing the gas sector.
From an overall economic standpoint, there is a rationale for an upward price adjustment to cut back on subsidies. But to what extent and with what frequency this would be done ought to be important considerations to be weighed carefully before hiking the price.
CNG price was increased by 100 percent from Taka.8.50 to Taka 16.75 per cubic metre in April 2008 by the then caretaker government. This time it is a fifty percent raise in three years time. There is an element of abruptness about it.
Here comes the question, as to why the authorities did not decide on putting some kind of a limit on conversion of vehicles to CNG in the first place. It has been free for all as people of all strata settled for conversion including the upper end of the economic class. This perforce led to staggered intake of gas at the filling stations and now the price hike.
We are now left to face the fallout of the CNG price hike. All manner of CNG using transports have immediately raised their fare. The tendency is to enhance fares out of proportion to increase in CNG price.
We feel the government will have to immediately intervene to make sure that the increase in transport fares is strictly proportionate to the increase in the CNG price.
Higher transport costs have a way of raising prices of essentials, something that the government will have to attend to within the framework of its overall endeavour to keep consumer prices affordable in the face of rising inflation.
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