Common people to suffer for price hike of diesel, kerosene: Experts

As prices of diesel and kerosene have been increased, experts feared that economic sectors dependent on these fuel oils would be affected.

They said consequently, low income and marginalized people will also be hurt.

The price hike will flare up the costs of public transports, cost of irrigation and price of electricity, resulting in pushing the prices of daily essentials up.

Thus, diesel price hike may cause a domino effect in the economy, pushing cost of production and prices up. Experts said ultimately, cost of living would increase across the country.

On Wednesday, the government raised the prices of fuel oil, especially of diesel and kerosene, by 23 per cent.

Hence, at the consumer level, one litre of diesel is selling at Tk 80 as against its earlier price of Tk 65, respectively. This is equally applicable to kerosene.

Professor Shamsul Alam, an energy expert and energy adviser to the Consumers Association of Bangladesh (CAB), told Business Insider Bangladesh on Thursday that fuel oil price hike is not unacceptable and it is illogical at this point. He said people and especially the lower income-ones are already bearing the brunt of Covid-19 pandemic as their income has been eroded largely.

Therefore, a large part of the population would be affected by this price hike.

“If the price of fuel oil increases in the world market, it takes three months for the effect to be felt in Bangladesh. But, when prices fall in the world market, we are told that Bangladesh is adjusting its losses (by not lowering prices of fuel oil). And, the price does not fall. So, it is not logical to increase the price now.”

“Overall, it will have a negative impact on consumers’ purchasing power,” Shamsul further said.

“The price hike of fuel products will increase transportation costs. Also, it will have a negative impact on the country’s economy,” said BUET Professor of Energy Department, Dr Ijaz Hossain.

“Increasing kerosene price along with diesel will make the lives of the poor who depend on kerosene more difficult,” the professor said.

Bangladesh Petroleum Corporation (BPC) has, however, argued in favour of upward price adjustments.

“Oil prices are constantly rising in the international market. As a result, in October this year, the company supplied various grades of petroleum products at the current price, incurring a total loss of Tk 726.71 crore”.

“Every day BPC is incurring a loss of Tk 20 crore.”

Some four years ago prices of fuel oil made downward adjustments as prices fell substantially in the international market due to overproduction. At that time the price of diesel was set at Tk 65, kerosene at Tk 65, octane at Tk 89 and petrol at Tk 86, respectively.

Experts said such fall had benefitted low income and marginalized people.