• Wednesday, Sep 26, 2018
  • Last Update : 06:43 pm

‘Extortion in transport sector fuels price hikes during Ramadan’

  • Published at 12:36 am May 18th, 2018
  • Last updated at 01:01 am May 18th, 2018
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Khandaker Ruhul Amin

In an exclusive interview with the Dhaka Tribune’s Shariful Islam, Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Director Khandaker Ruhul Amin, who was acting president of the country’s apex trade body from April 14 to 19, discussed various business issues

Ramadan will start soon. There is a practice among the businesses of increasing prices of essential commodities during the month of fasting. Why does this happen and what is the FBCCI going to do to stop such malpractice?

Yes, it is indeed common that prices of essential commodities are hiked after the budget and during the month of Ramadan. The main reason for the increased prices is rampant extortion in the transport sector, with police officials and political activists involved in the illegal activity. If vested quarters remain active in the transport sector, the prices of goods will obviously rise during the month of fasting.

However, there is also a matter of demand and supply behind the increased prices of some food items, as there is an increase in demand for some five to six items during Ramadan, while supply is usually insufficient.

This year, we think the prices of essential commodities will be under control, as we have been working in collaboration with the Ministry of Commerce and the Home Affairs Ministry to tackle the issue. We will hold a meeting with them on the issue shortly.

We have already met with all related businesses, including the Khatunganj Traders’ Association and Moulvibazar Traders’ Association, with a view to ensuring stable prices of essential food items during Ramadan.

What should the government’s highest priority be in this regard?

The government, especially the Commerce Ministry, have to beef up the market monitoring process, as not all food items increase in price. So far, we have identified six food items which see higher demand in Ramadan and these include sugar, edible oil, and gram. The supply of these products is at a satisfactory level this year, and there will be no shortage.

Therefore, as long as there is strict monitoring, there is no chance that there will be hikes in the prices of goods. Meanwhile, the Home Ministry should take firm action to prevent extortion in the transport sector.

Businesses always demand “single digit interest rates” on credit, while from the beginning of this year the lending interest of the banks has gone beyond 10%, and crossed 12% in some cases due to the liquidity crisis in private banks. What is the impact of this on business and what are your demands?

The sudden increase in the lending interest rate by 2-3% is very alarming, and it raises the cost of doing business. Many of our businesses now have to pay 12% interest rate against credit they had taken at 9% interest. The government has already taken some bail-out measures, so the lending interest rate should come down and stabilize.

The government is almost set to import Liquefied Natural Gas (LNG) from next month, and the price of the LNG would be three times higher than that of domestic gas. What is the FBCCI’s stance in this regard?

We welcome the LNG import by the government, as industrial operations have been greatly hampered due to the gas crisis. However, we want subsidies on LNG prices when the supply of imported LNG begins, so that local industries can remain competitive in production. Otherwise, the companies using LNG will have difficulty competing with the industries using domestic gas. As such, the government should fix the LNG price at a logical level with subsidies, if needed.