Editorial
Fuel price hike again
Consumers need safeguard against exploitation
WHILE announcing the upward price revision of fuel, the state minister for petroleum and mineral resources was quick to put the hike down to "high prices in the international market as well as in India" and a bid to "recoup losses of the state-run Bangladesh Petroleum Corporation". The price differential between local and Indian markets encourages smuggling of petroleum to the neighbouring country, he reasoned. Also, he said the BPC losses accrued over the years stood at some Tk 3,100 crore and were mainly due to price differences between local and international markets. Apparently, the minister did not do his home-work right.
Whatever price differential there is of petroleum between markets in Bangladesh and India, to make a windfall out of it, a smuggler has to run a sizeable operation involving a huge logistical set-up. Had there been such large-scale smuggling operations, the border forces would have surely at least spotted them, if not stopped them outright. So far, we have not heard of any and the state minister himself could not produce any specific data on petroleum smuggling. On the question of BPC losses, too, he was far from depicting the true picture. The state-run agency remains the greatest source of revenue for the government, paying more than Tk 3,500 crore to the exchequer in duty and value added tax (VAT). The BPC's predicament stems largely from poor management and high taxation policy.
The increase in the fuel price by such a higher notch is certain to raise the overall cost of living, which even without this had shot up 8.52 per cent last year. Agricultural and industrial production cost will go up because of increase in diesel and furnace oil price. The immediate effect of the price revision will be on the public transport system. Passenger vehicles such as buses, minibuses and autorickshaws are reported to have increased the fare, in some cases, out of proportion to the fuel price rise. Ultimately, the middle- and lower income groups will be the worst hit by the price revision.
Over the years, the government has increased fuel prices on the grounds of upward trend in the international market. However, it has never scaled them down following downswing in the international price. It's the government's responsibility after the fuel price increase to ensure that unscrupulous traders, transport owners and service providers do not fleece the consumers using it as a pretext.
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