Bitter Truth
Fuel price hike appreciates cost of food
WITH prices rising almost every day and incomes remaining the same not only the poorest class but also the lower middle and middle class people are in dire strait. Compounding the problem already affecting every aspect of life, the sudden big rise in the price of petroleum products, linked with the livelihood and living of all classes of people has pushed them on the brink. The government handout explaining the rationale of hike in a bid to save the exchequer of the subsidy burden although appears somewhat logical but transferring the burden in a quick jump on the people already living on the margin seems to be a very unkind gesture to salvage a sinking economy.
Attributing the price hike of petroleum products in the country to the unusual rise in the price of these products in the international market (the price per barrel of crude oil was $60 last year and now stands at $143), the finance adviser as well as special assistant to the chief adviser for energy affairs, however, sounded an optimistic note assuring people that transport owners would not increase the fare disproportionately.
According to one government handout released in the newspaper in the recent past, 35.7 lakh metric tons of petroleum products were imported in the country in FY 2006-07 out of which 22 lakh metric tons or 65 percent was diesel. Out of these total imports sixty per cent was used for transports, 32 per cent for agriculture and the rest for other purposes. So the transport sector will bear the brunt of the price hike of fuel most. The special assistant's estimate based on government statistics that a 12.5 to 13 per cent increase in the transport fare of all categories of transport will have a negligible impact on the cost of living appears to be only a wishful thinking. Defying all such estimates a truck carrying either rice or other commodities from Dinajpur or Khatunganj to Dhaka is now charging 14,000.00 taka instead of its previous rate of 10,000 taka. Also the price of rice at the production centres either at Naogaon, or Dinajpur has registered a rise of Tk100 to Tk. 150 per maund (40 kg) immediately after the announcement of the price hike of petroleum products in the country.
At a time when the price hike of food items and essential commodities has hit the poor people hard, the fixed income group including those not on any job, retired employees of either government or private organizations find themselves in a bind. The Centre for Policy Dialogue has revealed in a seminar in the recent past that the number of people living below the poverty line has now reached 47 per cent mark from 40 per cent just a year ago because of the inflationary trend. And according to Unnayon Samonnoy because of the increase in the price of fuel of all varieties by about 40 per cent inflationary trend will increase by 1.8 per cent more bringing more people below the poverty line. And consequent upon the increase in oil price, expenditure on house rent, education, medical treatment and conveyance has further shot up.
Altaf Hossain, a retired government employee having still four members in the family dependent on him faces a grueling battle with his savings like a small monthly pension and a pension benefit that he has put in a bank The returns from these benefits do not increase but his family expenditure is shooting up every day. These days he does not include pulses and milk in his monthly grocery purchase list. For the last six months he could not buy even a kilo of meat or chicken.
Harun, a 30 year old car driver with two children, wife and old mother working in a construction firm at Banani finds it almost impossible to make both ends meet with a monthly salary of Tk. 6000.00. After paying the house rent of Tk.2,000.00 for a ramshackle house at Madartek, he is left with just Tk.4000.00 to fend for the whole family. Harun narrates his predicament, "I have withdrawn my daughter now studying in class eight from school as there was no way I could afford the cost of her schooling, especially the conveyance to and from school."
To cut the long story of the ordeal of hundreds of thousands of people in the country short, every income group is cutting down the expenses on meat, pulses, chicken, fish and edible oil. And milk, considered an essential item for children, has now become a luxury not only for lower income households but for all sections of the populace. Nutritional experts are worried if this trend continues there could be a whole generation of calcium deficient children in the country.
As per estimate given by CAB (Consumers Association of Bangladesh) commodity prices in general have increased by about 15.38 per cent but the price of rice, wheat, pulses, flour, edible oil and milk food items has increased by about 45 per cent just within the last six months. People fondly recall that there was a time when a salary or income of 10,000 taka a month for a family comprising five members would have given a
comfortable living but now these people with funds more than that collected through borrowing or disposing of the savings live just on the margin of the poverty line or below it.
Farmers or the producers of agricultural products in the country who do not have any stable income are now hard pressed and most often they get cheated by the middlemen who buy their produce at a throw away price and hike up the prices of these produce on
different pretexts and enjoy the gains themselves. Pathetically true, most of these farmers having no land of their own but still vitally linked to farm practices in the rural Bangladesh remain perpetually starved and mired in grinding poverty all through the year. They provide us with the food we eat, but they can not afford square meals a day. Agreeing with the government views that GDP(Gross Domestic Product) has risen, the question remains for whom it has risen? For almost 90 percent of the population real income has been decreasing and they don't have any financial security or support to protect them against any calamity in the coming days.
The real story is that a combination of supply side bottleneck and arbitrary increase in transport fares due to oil price hike has fuelled a sustained rise in prices of primary goods. Unhappily, the rise in prices of food items and vegetables that are carried by trucks from the remotest places in the country has not been consistent and proportionate with the fuel price hike. Rather it's the truck owners syndicates' arbitrary decision that rules the day.
Inflation has become the major concern for the struggling economy. One might accept inflationary trend in a growing industrial economy but this is not so with Bangladesh. The most important factor causing a 40 to 45 per cent increase in the prices of primary goods may be attributed to market manipulation by interested groups and coteries. The government, despite achieving some spectacular successes in some other areas, seems to have failed to initiate steps to crack down on hoarders, market manipulators and ban forward trading in primary goods.
Unquestionably, part of the price hike of commodities has resulted from high import bill on diesel now being used in the transport sector. As a measure to reduce diesel cost, government must introduce mass transit, ban import of cars, small vehicles and three wheelers and facilitate goods carriage by railways and river routes , especially during rainy season. Finally, self sufficiency in agricultural commodities is the last resort to combat price hike of foodstuff and other farm products. And in order to achieve that at least for one or two years irrigation should be made free for all farmers instead of providing diesel subsidy in cash and it has to be ensured that supply of fertilizer along with diesel goes to the actual farmers in time.
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