The people were going to bed yesterday with frustration cautioning another price hike of daily commodities and essentials due to government declaration to increasing fuel prices abnormally last night. The government increased the price of fuel by a jump from BDT 34 to BDT 46 per litre suddenly. The diesel price was increased by BDT 34 to BDT 114 per litre, octane by BDT 46 to Tk.135 and petrol by BDT 44 to BDT 130. Price of fuels has increased in international market and the counties including South Asia are adjusting it regularly; Bangladesh is also adjusting it now too for lowering the loss of Bangladesh Petroleum Corporation.
When price of diesel was 170 dollars, we did not adjust the price then. I was waiting, hoping for the situation to improve. In general, BPC starts incurring losses whenever fuel price goes higher than 79 dollars per barrel. The price went up as high as 170 dollars a barrel. BPC then told me, “Sir, we want to adjust the prices.” If we adjusted the prices then, diesel price would go up from Tk 80 per litre to Tk 160 per litre. I told BPC to wait a while and then adjust the prices. BPC has already incurred losses of over Tk 8,000 crore from its own funds.
– Nasrul Hamid, The state minister for power, energy and mineral resources. Courtesy: The Daily Star
Due to the Russia-Ukraine war, the price of fuel oil became unstable in the world market, as a result the exchange rate between dollar and taka was also affected, in which BPC had to count losses. Due to the high price of fuel oil in neighboring countries, there was a risk of smuggling. BPC’s loss from February to July this year was about Tk 9000 crore due to price hikes in the world market. It is in this context that the government has been forced to adjust the prices.
– Obaidul Quader, The Road Transport and Bridges Minister, Courtesy: The Prothom Alo
A few days ago, the ministry of agriculture increased the fertilizer (Urea) prices by BDT 6 to BDT 22 per kg. Hearing to soaring the fertilizer prices, the feeder folks of the nation, the farmers dumbfounded and beat their foreheads for becoming a misfortunate of the nation. The ministry of agriculture defended by arguing that the current price of urea fertilizer is BDT 81 in international market and the government will have to provide a subsidy of BDT 59 per kg even after increasing the prices by BDT 6. By selling the grain at less than cost of production the farmers purchase irrigation in rainy session with increasing prices, now they have to pay more prices for fertilizer. Who will calculate the subsidies given by farmers each year for increasing agricultural production to ensure food security of the nation?
“Agriculture will be affected due to increase in fuel oil prices. But the farmers will cultivate even it it is difficult. Because the farmers are sacrificers. They also cultivate by selling their wife’s neclances and earrings. They sell cows and goats and buy fertilizers to grow crops.”
– Dr. Abdur Razzak, Minister of Agriculture
Courtesy: Bangla Tribune
The government is arguing to overcome forthcoming the danger by stabilization of foreign reserve for saving the nation in near future but people aren’t giving the ear to the argument, they are roaring for increasing price hikes of essentials and cost of livelihoods that a cautionary sign of falling to disaster. Not arguing for forthcoming danger, the government should hear the cry of the people to overcome disaster.
Around 12 noon, farmer Rabiul Karim was walking along the path inside the bypass field of Kushtia city. His house is in Jhalupara area of Kushtia suburb. He was returning home after irrigating his land. An oil bottle hung from the head of the spade on the shoulder. Regarding the increase in diesel prices, he said, ‘I am sleeping at night, I did not know anything, I wake up in the morning and got the news of increasing fuel oil price. Farmers are living at the problem. How will I produce crops? Where will I get the extra money for fertilizer? If you sell the crops in the market, you will not get fair price. If I spend own money, I will not get any return. Farmer Rabiul complains, ‘Rice market is upward for some profiteers, but paddy market is not upward. Farmers are affected by this. If the government saves the farmers, then farmer would be survive. And if the government thinks that farmers are not needed, then we will not be survive. Courtesy: Prothom Alo
After the rising of fertilizer price, the fuel prices have risen to meet the conditions of the International Monetary Fund (IMF) for a loan amount of 4.5 billion USD; the vibration of the discussion is tending to grow. If the government receives the amount of 4.5 billion USD from IMF, the foreign reserve will reach at about 44 billion USD (now the foreign reserve is 39.8 billion USD). But the conditionality of IMF like withdrawing subsidy from service and agricultural sector could create disaster in the near future.
As per media report, the remittances, export earnings and FDI are tending to grow with the wind. The highest amount of remittance came in July in the last 15 months. As per latest report of Bangladesh Bank on remittance, the figure of remittance 209.68 million USD came in July 2022. Bangladesh Bank also released the latest data on foreign direct investment (FDI). Bangladesh Bank said, a total of 4.71 billion USD foreign direct investments came into the country in the fiscal year 2021-22, which is 39 percent higher than the previous year. According to Export Development Bureau (EPB), exports of goods registered nearly 15 percent growth in July 2022, the first month of the new fiscal year of 2022-23, the export income was 398.28 crore USD, which 14.72 percent higher than the same period of last year.
If the government receives IMF loan, it will take time to 3 or 4 months. During this time, the government could give importance to increase remittance, export and FDI earning and bargain with IMF about conditionality. Can we examine these opportunity to avoid disaster and overcome the danger?