Fuel price hike to deepen inflation, raise costs across economy: BCI president

The sudden 18 percent increase in fuel prices will immediately raise costs across the economy and further weaken business confidence, said Anwar-ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries.

“The government should have discussed the matter with stakeholders and increased the price gradually. Announcing such a sharp increase without prior consultation will hurt people’s confidence in the government,” he said.

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The decision comes at a difficult time, with inflation already high, private-sector credit growth weak, bank loan classification rising and businesses struggling with high gas and interest costs, Parvez said.

“Industries are already facing higher production costs and reduced production. The fuel price hike will put further pressure on them,” he said.

He warned that higher fuel prices would push up inflation by increasing transportation, agricultural and industrial costs.

“Farmers’ costs will rise, which will increase food production costs. Industries will also face higher operating costs, while their capacity to produce and employ people will come under further pressure,” he said.

The impact will be felt across sectors because businesses, shops and households in areas with inadequate electricity often rely on diesel generators, he said.

“Transportation costs will rise significantly. Raw materials coming from Chattogram, agricultural products coming to Dhaka, imported goods and export shipments will all become more expensive,” Parvez said.

He said the increase would have a lasting impact because transport costs rarely come down once they rise.

“Energy is a very sensitive issue. We already have problems with inflation, banking and energy. If costs keep rising, it will become increasingly difficult to keep the economy stable,” he said.