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Dhaka Tribune

Businesses ask government to lower fuel price

The unprecedented spike in their rates were hurting businesses and would go on to hamper job creation

Update : 15 Aug 2022, 03:33 PM

Businesses on Sunday urged the government to cut fuel prices, saying that the unprecedented spike in their rates were hurting businesses and would go on to hamper job creation. 

The appeal was made at an event organized by the Dhaka Chamber of Commerce and Industry (DCCI) in the capital.

It came less than two weeks after the government raised the fuel prices by up to 51.7% as prices soared globally, the second hike in nine months.

“In many ways, diesel is an essential commodity, so its rise is proving costly for the economy,” said Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

"At a time when the fuel price is falling in the international market, such a huge price hike has stunned us," he said, calling on the government to adjust the fuel price every three months in line with international prices.

Hatem pointed out that industries in many areas, including Narayanganj, were getting inadequate supply of gas, thus hampering production.

“Additional costs in the supply chain need to be lessened to control food inflation,” said DCCI president Rizwan Rahman, adding that international market and price dynamics need to be monitored to avoid irrelevant price shocks.

“Essential commodities supply through the Trading Corporation of Bangladesh needs to be expanded outside Dhaka,” he also said.

Rahman suggested ensuring a flexible interest rate regime to reduce inflationary pressure and stabilize foreign currency reserves.

The DCCI chief said government borrowing through savings certificates needed to be reduced and cheap sources of funds from external sources must be accessed.

Currency swap can be considered to facilitate low-cost imports and improve the foreign currency reserves, he also said.

Md Shafiul Islam, a ruling party lawmaker and former president of FBCCI, said the existing crisis is temporary and the government is managing the situation in an efficient manner.

Saying the business community is the engine of growth, he urged the tax department to be proactive and help businesses grow without any hassles.

“Not only Bangladesh's economy but the whole global economy is going through a tough time in terms of economic stress, inflation, fuel price hike and supply chain disruptions,” said State Minister for Planning M Shamsul Alam.

“Some indicators are facing discomfort but the overall economy is doing well,” he also said.

The manufacturing sector saw a 23% growth in FY22, and other facts and figures showed that the economy is on the right track.

"So, there is no need to panic that the economy may collapse like Sri Lanka."

Full automation of the taxation system will reduce hassles and boost tax collection, he added.

Habibur Rahman, chief economist of the Bangladesh Bank, said the central bank was thinking about the option of a currency swap with a number of countries in order to cut the pressure on US dollars.

"But it will be possible only with the countries with which we have a lower trade gap. When the trade gap is higher, we have to diversify our foreign reserves portfolio since a currency swap involves risks."

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