The daily expenses of people in the domestic market have begun to rise once again. From edible oil, vegetables, and cooking gas to transportation—a new pressure of increasing costs has been created in almost every sector.
Due to the impact of international instability, uncertainty in fuel supply, and increased transportation costs, price pressure is gradually rising in the daily commodities market.
Consequently, while income remains stagnant, people's expenses have started to increase, making the livelihood of the general public even more difficult.
This impact is falling most heavily on low and middle-income families. Due to the rise in daily commodity prices, the increase in LPG gas prices, and rising transportation costs, the monthly expenditure calculations for families are changing rapidly.
Economists say that if the instability in the fuel sector persists, this cost pressure could increase further.
In recent times, the price of loose edible oil in the market has increased significantly. Retailers report that within a span of just two days, the price of loose palm oil and soybean oil has increased by Tk7 to Tk10 per liter.
According to traders, the price has suddenly been increased by about Tk1,000 per drum in the wholesale market. This has had a direct impact on the retail market.
Traders state that due to the ongoing war situation in the Middle East, instability has been created in the international fuel market. As the supply of fuel oil is disrupted, transportation costs are rising. Consequently, the prices of import-dependent products have started to increase.
There was a slight upward trend in edible oil prices even before Eid-ul-Fitr.
However, stakeholders believe that new pressure has been created in the market after military tensions increased in the Middle East centered around Iran.
The biggest blow to people's increasing expenses has come from the cooking gas market.
The Bangladesh Energy Regulatory Commission (BERC) has announced new prices for LPG for April.
In the new announcement, the price of a 12 kg LPG cylinder has jumped by Tk387 to Tk1,728.
Last month, the price was Tk1,341. This means the price per kg has increased by approximately Tk32.30. This is the largest price hike for LPG in recent times.
BERC chairman Jalal Ahmed announced this new price on Thursday, which became effective from the same evening.
According to the new calculation, the price of LPG per kg has been set at Tk144.04. Based on this, the prices for various sizes of cylinders will be determined.
However, there have long been complaints regarding the availability of gas at the fixed price in the market. Consumers complain that in many cases, LPG is being sold for Tk300 to Tk400 more than the fixed price.
On the other hand, the price of auto gas used in vehicles has also increased. According to the new rate, the price of auto gas per liter has been set at Tk79.77, which is about Tk18 higher than before.
Expenses rising faster than income
Due to the fuel crisis, many industrial factories are partially operational. Production has decreased particularly in small and medium enterprises (SMEs). Because of this, many workers are losing their jobs or are being forced to work at lower wages.
Overtime work has stopped for many workers. Consequently, monthly income is decreasing. At the same time, their lives are becoming more difficult due to the rising costs of food, fuel, and transportation.
A similar situation is observed in the transport sector. Due to the fuel crisis, vehicle movement has decreased in many places. As a result, the income of drivers, helpers, and people involved in ride-sharing services is decreasing.
On the other hand, since a limited number of vehicles are operating, there are also complaints of overcharging in many cases. Consequently, the commuting costs for passengers have increased.
As power shortages have emerged in industrial factories, many institutions are using generators as an alternative. This is increasing production costs.
A similar situation has arisen in the transportation of goods. Traders have stated that the prices of products in the market are rising because transportation costs have increased due to the diesel crisis.
Kamruzzaman Kamal, director (marketing) of Pran-RFL Group, said that almost all sectors of the economy are related to fuel. Currently, due to uncertainty in diesel supply, problems have been created in both the production and marketing of products.
According to him, because transportation is limited, products are often late reaching the market. This reduces supply and shows a trend of rising prices in the market.
The impact of the fuel crisis has also started to fall on the agricultural sector. Since there is a heavy dependence on diesel for irrigation, there are fears that agricultural production will be hampered if supply is disrupted.
According to M Zakir Hossain Khan, chief researcher of research firm Change Initiative, if the price of oil in the international market increases by $10 per barrel, Bangladesh's additional expenditure could increase by about $1 billion annually.
According to him, if the price of oil remains above $120 for a long period, the additional annual expenditure could stand at $4 to $5 billion. In local currency, this amount is more than Tk60,000 crore.
He said that Bangladesh is dependent on imports for about 95% of its fuel. Consequently, the impact of price increases in the international market falls quickly on the country's economy.
Pressure on macroeconomy
Economist Prof Abu Ahmed said that fuel is a sector with which almost all areas of the economy are involved. Consequently, if a fuel crisis occurs, its impact falls on production, transportation, inflation, and overall economic growth.
According to him, in the current situation, it is necessary for the government to reduce operating costs and adopt austerity policies in fuel consumption.
He said that currently, the country's external debt is about $115 billion. A large portion of the budget is spent on interest payments. In this situation, if fuel costs increase further, more pressure could be created on the economy.
Economists believe that to tackle the current situation, the government must take steps such as ensuring fuel supply, strengthening market monitoring, and keeping the production sector operational.
At the same time, priority needs to be given to fuel supply in important sectors such as agriculture, transport, and export-oriented industries.
According to them, the possibility of price pressure in the market decreasing completely is low until the international situation stabilizes. As a result, this trend of increasing expenses for people may continue for the time being.