Rising electricity and fuel prices are set to further intensify inflationary pressure on households, with low- and fixed-income groups bearing the brunt of escalating living costs, the Centre for Policy Dialogue (CPD) has warned.
Speaking at a media briefing titled “Bangladesh Economy in FY2025–26: Multidimensional Challenges in a Transitional Period” at its Dhanmondi office on Thursday, CPD Executive Director Fahmida Khatun said recent upward adjustments in energy prices would make day-to-day household budgeting increasingly difficult.
“Inflationary pressure has been aggravated by higher fuel costs. The latest increase in electricity tariffs will add further strain on consumers,” she said.
The briefing was held ahead of the national budget for FY2026–27, aiming to assess the country’s macroeconomic performance in the current fiscal year.
CPD Distinguished Fellow Professor Mustafizur Rahman and senior researchers were also present.
Fahmida Khatun said Bangladesh’s economy continues to face multidimensional challenges stemming from both domestic structural weaknesses and global economic uncertainties.
According to CPD data, inflation rose to 9.04% in April, driven largely by higher fuel, transport and service costs. Wage growth, however, has remained significantly lower than inflation, eroding real incomes and reducing purchasing power, particularly among low- and fixed-income households.
She cautioned that recent improvements in selected macroeconomic indicators should not be interpreted as a durable recovery, warning that underlying vulnerabilities remain unresolved.
CPD’s analysis shows that between December 2025 and May 2026, fuel prices increased sharply. Diesel rose by 15%, while petrol, octane and kerosene increased by nearly 20% over the same period.
The rise in fuel costs has had a cascading effect on transport fares and logistics expenses, pushing up prices of essential commodities across the country.
The think tank also highlighted a significant rise in liquefied petroleum gas (LPG) prices. A 12kg cylinder, which cost Tk1,341 in March, rose to Tk1,885 in June—an increase of over 40% in just a few months.
This has further squeezed household budgets, particularly in urban areas where LPG is widely used for cooking.
Fahmida Khatun said structural weaknesses in market management continue to exacerbate inflationary pressures.
“The presence of multiple layers of intermediaries in supply chains often leads to excessive price escalation at the retail level,” she said, adding that such inefficiencies disproportionately affect consumers during periods of economic stress.
CPD Senior Research Associate Helen Mashiat questioned the rationale behind the recent electricity price hike, noting that global fuel prices had already begun to decline.
She suggested that instead of across-the-board tariff increases, a differentiated pricing mechanism could have been adopted, placing higher costs on large consumers while protecting low-usage households.
CPD also flagged governance and institutional weaknesses as key barriers to economic stability, citing weak enforcement of regulations, accountability gaps and policy implementation failures.
Fahmida Khatun stressed that short-term improvements in selected indicators should not obscure deeper structural problems.
“Temporary relief in some macroeconomic indicators cannot substitute for long-term structural reforms,” she said, urging policymakers to prioritise institutional strengthening, market oversight and targeted social protection ahead of the upcoming budget.