The recent fuel price hike in the country will have a negative impact on the overall economy, according to Dhaka Chamber of Commerce & Industry (DCCI).
Despite the gradual fall in the global energy prices in recent times, the government increased the prices of all refined fuel oil products by 42.5 to 52 per cent on Saturday.
DCCI thinks that the increase in gas price in June 2022 and fuel price hike on Saturday will have an immediate negative impact on transportation, essential commodities, and electricity, said a press release on Sunday.
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Diesel is the most consumed fuel in the country, accounting for around 73 per cent of the country's total fuel consumption. For instance, 90 per cent of the transportation sector is dependent on diesel.
Additionally, vehicles which are powered by octane and petrol will also have to bear the increased cost. This will also hike the domestic freight cost and eventually will lead to the cost of necessities across the country.
DCCI feels that another major impact will be on the production cost of agricultural products as diesel is widely used for irrigation purposes. Recurring fuel and fertilizer price hikes will directly impact the production cost of agricultural products and gradually hamper food security and further misery in public lives.
Manufacturing Industries are already being suffered due to electricity rationing as diesel and LNG price went high globally.
However, this price hike of fuel in addition to the recent price hike of natural gas will have a domino effect on the entire economy, DCCI thinks. The cumulative impact of price hike of fuel will cause inflationary pressure on the economy by raising the operating cost of all energy-dependent businesses and industries.
Considering the situation, DCCI feels that for ensuring long-term energy security, Bangladesh needs to frame out a long-term strategy as well as to continue onshore, offshore gas exploration, energy mix, and cost and energy-efficient electricity generation.
Moreover, austerity in consumption should be strictly followed up. DCCI also recommends reducing the fuel price as soon as it comes down in the international market considering its negative impact on the economy.
