Editorial
Fuel price increased again
Was it unavoidable?
Although the price of fuel, i.e. diesel and octane has not been raised in a year, this is the fifth fuel price hike during the tenure of the present government. As of January 4, 2012, price per litre of diesel and kerosene have jumped by Tk7 and that of octane and kerosene recorded an increase of Tk5. Hence, consumers will now pay Tk68 per litre of kerosene and diesel, Tk99 for octane and Tk96 per litre of petrol.
As expected, rationale for such increase in price of fuel across the board is an attempt to reduce subsidies and an increase in price of fuels in the international market. The move will help government to save Tk2,500 in subsidies. While that may good news for the government, it certainly means bad news for not only vehicle owners but for consumers in general. Given the fact that the government has raised prices of fuel four times in 2011, it is yet unclear precisely what 2013 holds in store for us. It is somewhat difficult to understand the government position which hopes that international oil prices will stabilise, especially in light of the heightened tensions in the Mid-East revolving around Iran. Our past experience tells us that once prices are increased they stay that way regardless of prices in international markets.
The inflationary pressures that will inevitably accompany this latest price hike are multifarious in nature. As stated before, transportation costs will go up and the increase will be much more than a proportionate increase. As we all know very well, any increase in fuel prices increases cost of transportation leading to rise in prices the “excess†burden of costs that is ultimately borne by the end-consumer. Again, going by past experience, transporters of both bulk goods and passengers have a tendency to put into effect revised rates that defy logic. This action will merely result in multiplication of cost of goods. Since there appear to be a deficiency in authorities' capacity to regulate a generally unregulated transportation sector, such fears are not totally unfounded. Whether the authorities have taken all these into cognizance is the question that exercises the public mind.
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