The Financial Express

Record hike in LPG price

| Updated: February 06, 2023 21:34:28

-Representational image -Representational image

Bangladesh Energy Regulatory Commission (BERC) has just hiked the price of liquefied petroleum gas (LPG) by 21.59 per cent. This is the highest jump in LPG price in a single go, in the history of LPG price increase in Bangladesh. So, from February's end, consumers will be forking out Tk1,498 per 12kg cylinders, an increase of Tk266 per cylinder. Of course, BERC has its rationale for increase of price, but that is not the point here. At a time when prices of all fuels, starting from octane, petrol, diesel have made jumps upward, this essential fuel that is used for cooking and which serves as 'Autogas' for vehicles, comes as yet another major blow to consumers. What is worse is that consumers are being forced to pay an additional amount between Tk 250 and Tk 300 for a 12 kg LPG bottle at the retailers' level. The government or for that matter BERC has no control over the operators in the LPG marketing.

With piped gas to households and commercial eateries/hotels at a full stop for many years now, people had made the gradual transition to bottled LPG for meeting cooking needs. Unfortunately, no number of reasons put forward by the BERC will have any traction with consumers who are now reeling from the steep inflation. It is better not to think about those who are even less well off. While it may make perfect sense to implement all the recommendations of foreign lending institutions when it comes to subsidising fuels, the government must take into cognizance the plight of the poor consumers.

Every price increase of this sort means the extra cash will have to come at the expense of some other expenditure an average family had earmarked for. Be it education, entertainment or healthcare. That people are complaining about these things should not come as a surprise to the powers-that-be. Their backs are now to the wall, thanks to multiple barrages of increase in fuel (for cooking or otherwise) prices and other essential items. With the holy Ramadan remaining few weeks away, they are now bracing for another bout of increase in prices of some key essentials.

Meanwhile, the BERC has expressed that this 'adjusted' cooking-fuel price for the domestic market is the result of Saudi Aramco contract price (CP) of February, factoring in the fluctuations in foreign-exchange rates and changes in value-added-tax (VAT). A very clinical and well-pronounced announcement, utterly lacking in any empathy for the millions who have been suffering from runaway inflation and will undoubtedly, suffer some more. If one is to believe the statement uttered by IMF country chief where he stated recently to the press that subsidising fuels does more harm than good since rich people drive around more and use the air-conditioner more. While partially true, what the economists and functionaries of multilateral institutions fail to see is that some fuels (like LPG) are essential fuel to fire up stoves that people use to cook food. Food is consumed not just by people who drive around  in luxury vehicles but by everyone, regardless of their bank balance or paychecks.  Some subsidies need to stay to act as a cushion for people hemmed in by inflation on all other fronts. The government needs to rethink its stance on the rate of price increase of LPG.

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