Bangladesh reports fuel price spike, raising inflation fears According to Reuters

By Ruma Paul

DHAKA (Reuters) – Bangladesh raised fuel prices by up to 51.7% effective Saturday, a move that will ease the country’s subsidy burden but add pressure on already high inflation.

The South Asian nation’s $416 billion economy has been one of the fastest growing in the world for many years.

However, soaring food and energy prices have raised import bills, prompting the government to seek loans from global lending agencies, including the International Monetary Fund.

An increase in fuel prices is inevitable given global market conditions, the ministry said in a statement, noting that Bangladesh State Petroleum Corporation (BPC) had suffered a loss of more than 8 billion taka (85 billion taka) million) from oil sales for six months. July.

“The new price level is unlikely to be acceptable to everyone. But we have no choice. Everyone has to be patient,” said Nasrul Hamid, minister of power, energy and mineral resources. state property told reporters Saturday. He said prices will be adjusted if global prices fall.

“It was necessary but I never imagined such a big increase. I don’t know if the government has fulfilled the prerequisites for a loan from the government,” said a government official. IMF or not”.

“At a time when people are suffering from skyrocketing prices of essentials, any increase in gasoline prices will put an additional burden on them,” the official added.

Bangladesh’s inflation rate was at its highest level of 6% for nine months in a row, with July annual inflation reaching 7.48%, putting pressure on poor and middle-income families to cover their expenses. daily fee.

That in turn increases the risk of social unrest in the country of 165 million people.

“We are struggling to make ends meet,” said Mizanur Rahman, a private sector employee. Now that the government has raised fuel prices, how will we survive?

Global oil prices closed the week on Friday at their lowest level since February on fears an economic slowdown could hit fuel demand. [O/R]

Oil futures fell below $95 per barrel on Friday after hitting a recent peak of $133.18 in March.

The most recent time, the government raised diesel and kerosene prices by 23% in November, which caused transport fares to increase by nearly 30%.

Against the backdrop of dwindling foreign exchange reserves, the government implemented a series of measures, including restricting imports of luxury goods and fuel imports including liquefied petroleum gas (LNG) and shutting down retail stores. diesel power plants due to intermittent power outages.

The country’s foreign exchange reserves stood at $39.67 billion as of August 3, just enough to cover about five months of imports and down from $45.89 billion a year earlier.

($1 = 94,4400 taka)