The impact of the government's latest fuel price hike is already being felt on the streets, with bus passengers paying up to Tk100 more and freight operators demanding thousands of taka extra even before new official fares are finalized.
The government raised the prices of four petroleum products by Tk20 per litre on September 20, pushing diesel—the main fuel for road transport—from Tk115 to Tk135, the highest price cited in the supplied report. Petrol now costs Tk160, octane Tk165 and kerosene Tk155 per litre.
The increase is expected to ripple through public transport, freight movement, agriculture, industry and household spending, adding pressure to an economy already facing elevated inflation.
Eventually, on Monday at Gabtoli Bus Terminal, long-distance passengers were being charged Tk50-Tk100 more depending on their destinations, with both AC and non-AC services seeking higher fares.
Passenger Md Ramzan from Kushtia said he had paid Tk500 to travel to Dhaka the previous day but was charged Tk100 more the next day, leaving ordinary commuters to bear the immediate impact of the fuel increase.
Bangladesh Bus-Truck Owners Association Chairman GR Shahid said operators could face losses without temporary fare increases and that a revised fare chart would be announced soon.
The Bangladesh Road Transport Authority's committee has proposed increasing long-distance bus fares by 20 paisa per kilometre and city bus fares by 18 paisa, with the final decision expected from the Road Transport and Bridges Ministry.
Besides, transport operators estimate that a typical 45-seat long-distance bus travels about 3.5km per litre of diesel.
At Tk115 per litre, the fuel cost was Tk32.86 per kilometre; at Tk135, it has risen to Tk38.57, meaning an additional Tk5.71 per kilometre or about Tk571 for every 100km.
The pressure is greater on longer routes. According to Roads and Highways Department data, the Gabtoli-Panchagarh distance is about 438km, while a round trip requires more than 250 litres of diesel; at 250 litres, the additional fuel bill is around Tk5,000 per round trip.
A bus carrying an average of 50 passengers would therefore face an additional fuel burden equivalent to about Tk100 per passenger, while a bus operating 25 days a month could incur around Tk125,000 in additional diesel costs.
Bus owner Md Kamrul Islam Babul said the additional Tk571 fuel cost per 100km leaves operators with little choice but to seek another fare adjustment.
Bangladesh Road Transport Owners Association Secretary General Md Saiful Alam said operators had already been struggling with losses and called for regular automatic fare adjustments linked to international fuel prices.
The increase is also affecting goods transport. At Chittagong's Khatunganj wholesale market, the freight charge for bringing a truckload of goods from Kushtia has risen from Tk32,000 to Tk40,000, according to warehouse manager Nurul Islam.
Truck fares on some routes have increased by Tk2,000-Tk8,000, while the cost of transporting 265 sacks of rice from Kushtia to Dhaka has risen from Tk20,000 to Tk22,000. A covered van carrying 10.5 tonnes of garments from Benapole to Kanchpur now costs Tk22,000, compared with Tk18,000-Tk19,000 previously.
Truck driver Mohammad Nazmus Zaman said a round trip between Satkhira and Chittagong requires about 230 litres of diesel, meaning his fuel expense will increase by around Tk4,600.
Business operators say they cannot absorb the additional transport costs indefinitely, meaning the higher freight charges are likely to be reflected in commodity prices.
Diesel is also critical to irrigation and agricultural production. Government figures cited in the report show that Bangladesh has 1.3-1.5 million diesel-powered irrigation machines, while agriculture and irrigation account for around 15% of diesel demand.
Higher diesel prices will therefore increase irrigation expenses, while generators and machinery used in industry will also become more expensive to operate.
On this issue, Dhaka University Economics Professor Selim Raihan said the country had already experienced high inflation for several years and that higher transport, food and cooking costs would place additional pressure on low-income households.
He identified urban low-income workers, farmers dependent on diesel-powered irrigation and informal-sector workers as among the groups most exposed to the shock.
Raihan also said that although price increases could make the government's financial calculations easier, the wider consequences could include higher inflation, weaker purchasing power and greater inequality.
Earlier, State Minister for Power, Energy and Mineral Resources Anindya Islam Amit said the government had no alternative but to adjust fuel prices because of rising international prices linked to the Middle East crisis.
The Energy Division says importing one litre of diesel currently costs about Tk205, leaving the government with a loss of around Tk70 per litre even after the latest adjustment.
However, international oil prices fell on Monday, with November futures declining 2.11% to $98 per barrel from $109 on September 15.
The latest increase has also renewed debate over fuel taxation and efficiency in the distribution system.
The National Board of Revenue collects 25% in taxes and duties on refined petroleum and 27.5% on crude oil, while government revenue from imported diesel currently stands at around Tk38 per litre in duties and taxes.
Asking about these issues, FBCCI administrator Md. Fazlul Hoque argued that increasing fuel prices should not automatically be treated as the only solution and suggested reducing waste and system losses in fuel supply and distribution.
Earlier, in August 2022, diesel prices rose by 42.5%, or Tk34 per litre, followed by increases in transport and production costs; inflation subsequently rose from 7.5% to 9.5%, according to the supplied report.
With inflation still above 8%, the latest fuel adjustment risks adding another layer of cost across the economy—from buses and trucks to irrigation, factories and food markets.