Fuel price hike not responsible for inflation: Commerce Minister

Commerce Minister Khandaker Abdul Muktadir faced a barrage of questions in parliament over the abnormal price hike of essential commodities. He stated that the fuel price increase in Bangladesh is at a very moderate or tolerable level compared to international markets.

He was responding to a supplementary question from Rumeen Farhana during a session presided over by Deputy Speaker Kayser Kamal on Monday, April 20.

Rumeen Farhana asked whether the government has any effective steps to control inflation, noting that inflation in Bangladesh remained in double digits for a long time and is still above 9 per cent for food items.

In response, the commerce minister said the global increase in fuel oil prices has been much higher than the rate at which Bangladesh has raised its prices. "We have increased fuel prices at a very moderate rate," he said.

He added that fuel accounts for only 7 to 8 per cent of total production costs in an industrial factory. Diesel prices have been raised by 15 per cent, meaning the impact is only on that 7-8 per cent portion of production costs, which is not a major shock.

Citing the transport sector, the minister said a bus uses 25-30 litres of diesel to travel 200 kilometres, increasing costs by Tk 450. The truck using that 30 litres of diesel can carry 10,000 kg of goods. The impact of that Tk 450 falls on 10,000 kg of goods. "It may sound like a big increase, but when calculated per unit of transported goods, it is not a major catalyst for inflation," he said.