Electricity, gas, fertiliser to cost more in 2022

The government wants to hike electricity, gas, and fertiliser prices to reduce subsidies and save an estimated Tk 10,000-12,000 crore in the next fiscal year.

Fund crunch triggered by the pandemic made it hard for the government to continue subsidising.

A rise in the overall inflation resulting from the hiked prices won’t pose a big issue, according to sources who attended a virtual meeting of coordination council and budget management and resource committee chaired by Finance Minister AHM Mustafa Kamal on Wednesday. The source said the government won’t adjust fuel prices for the local market even if they fall globally.

Finance Division would urge all ministries to implement 100 per cent annual development programme (ADP) for the current FY (2021-22) to achieve 7.2 per cent growth.

Recently, the Asian Development Bank revised Bangladesh’s growth forecast to 6.8 per cent for the current FY, down from its 7.2 per cent projection from the April outlook.

Speakers at the meeting also suggested a 50 per cent reduction in car purchase expenses, discouraging unnecessary foreign visits and quickly sought revised budget. The emergence of Omicron won’t threaten the new budget formulation process since the new Covid variant has a low mortality rate.

Bangladesh has spent Tk 12,000 crore to tackle the Covid-19 pandemic in the last and current FYs. It has another Tk 8,000 crore for future emergencies.

The meeting also decided in principle to increase ADP by 10 per cent in FY 2022-23 and stated that currently, the remittance flow, export and other sectors were maintaining a positive flow.