Vol. 5 Num 382 Fri. June 24, 2005  

Price of fuel and essentials

Reports in the media early this month said that some transport operators had increased the transport fare by around 25 per cent following the fuel price-hike announced by the government. It was not surprising being a foregone conclusion. When government raises prices of some item, the backlash is reflected in the form of increase in the price of related goods and services which immensely affect the common people. Therefore in civilized countries, the governments hardly go helter skelter in raising prices of things under their control. In most cases, they remain restrained and give subsidies to keep the prices of essentials stable.

If I remember correctly, long before I had read in a book that at one point of time, a European country had allowed subsidy even up to 45 per cent to the farmers to keep the prices stable and save the people from hardship. That could be a story of more civilized world of the bygone days. But things are more or less so even today in some third world countries. In India they do so. Just last month when the Energy Minister here was unnecessarily arguing to increase the price of fuel, Indian government came up with a big no over the issue in their country. However, now they have also raised it but it is not abrupt.

The fuel price hike came here at a most inappropriate time and on weak excuses. The time is inappropriate because prices of essentials had already gone high as a result of recent pay-hike allowed by the government for its employees. A hike in the fuel price now has compounded the miseries of common people because, with this prices of essentials have gone up further.

The other excuse for fuel price rise was that the world price of fuel had gone up. Might be the price has internationally gone up. But there could have been some justification in raising the price with rise of price internationally if the government had lowered the price locally when the international price of fuel had fallen. But this never had happened in the past. Only we hear of upward fixing of prices which they call 'adjustment'. Whatever name they give to the rise, the rise in price has its associated backlash to the distress of general people.

The next reason they cited was that the price of fuel in the neighbouring country was higher than here. So the fuel is smuggled out into that country. The Energy Minister must be knowing that the prices of hundreds of items in that country are much lower than those here in Bangladesh. That being so, do all those things are liberally smuggled into Bangladesh? Certainly not. If it were so, then the price differential would have been minimal between the two countries. And now with increase of fuel price in the neighbouring country also, again the difference persists. Should our authorities again raise its price here to check smuggling?

Further, fuel oil (petrol, diesel) if smuggled out, is certainly not done so in cans, jars or bottles. It must be carried in tankers and barrels. Do these become invisible that the personnel guarding the borders and out-posts cannot see them go through? So the fuel may be smuggled out because of their negligence. And if so, then for their fault, the general public must not be punished.

The further next reason cited was that if fuel price was not increased, then BPC (Bangladesh Petroleum Corporation) would incur huge losses. Again it is a case of 'robbing Tom to pay Harry'. If BPC is inefficient, they should be taken to task, why the people? And BPC is not the lone government agency that makes losses. There are hundred and one who do so. If the government can afford to sustain 101, then they can easily sustain the 102. There is some logic in this proposition but not in raising the price of fuel which has caused hardship to the people in the form of increased price of most of the essentials.

Even the government servants whose pay has been raised very recently have also been affected due to further increase in the price of goods and services. The benefit they got in the form of increased pay is now eaten away by the price hike. Probably they are at the same place financially where they were before the salary rise, for two simple reasons: (i) high inflation during the past few years and (ii) compounding of price spiral following pay-hike and the fuel price hike consecutively.

In view of the above the government should immediately review the fuel price, ask the transport operators to withdraw undue fare enhancement and devise measures to control the price of essentials. One of the ways to do so is to display price list of goods on sale. In the Philippines, I had seen that the shop keepers even print the price on the body of a small tomato let alone the big items. The sooner this is done the better so that the hardship faced by the people could be minimised.

Abu Imran is a former govt officer.