DHAKA, July 1: Impoverished Bangladesh appealed on Tuesday for global action to tame soaring crude oil costs, a day after being forced to hike state-set fuel prices by up to 66 per cent.
The government late Monday raised fuel prices by 34 to 66 per cent, saying it could no longer afford to sell petrol, diesel, kerosene and gas at subsidised rates set when oil cost just 60 dollars a barrel, against over 140 dollars now.
It’s an international crisis, said M. Tamim, the deputy energy minister in the army-backed government, which took power in 2007 and is slated to restore multi-party rule by the end of the year.
We think rich countries, oil-producing countries and the United Nations should deal with the issue urgently, he told AFP.
Even with the price hike, the government will have to spend 100 billion taka (1.45 billion dollars) on fuel subsidies, which will consume 40 per cent of the South Asian nation’s development budget.
Imagine a situation where crude hits 200 dollars a barrel. All development in Bangladesh will stop, Tamim said, urging world players to halt the price spiral “for the sake of Third World countries.
The price rises are a major blow for the country, one of the world’s poorest where nearly 40 per cent of the 144 million population survive on less than a dollar a day.
Bangladesh is already reeling from surging food prices, with the price of rice -- a staple -- nearly doubling over the past year.
The government hiked diesel and kerosene prices by 37.5 per cent to 55 taka (80 US cents) a litre (0.26 gallons) and petrol prices by 34 per cent to 87 taka a litre.
Furnace oil, used in small factories, jumped by 50 per cent, while a cylinder of gas used for cooking went up by 66 per cent.
Tamim called the price rises “unavoidable,” but the country’s top political parties blasted the government for the move.
It’s suicidal for the country. Poor people will be hard hit, said Syed Ashraful Islam, the acting general secretary of the Awami League.
The Bangladesh Nationalist Party (BNP), which led the most recent elected government, said the price hike would be “devastating” for the poor and farmers.
We strongly condemn the fuel price hike. The poor and the farmers will be poorer as a result. Food and vegetable prices will shoot up massively, causing extreme hardships for most people, BNP spokesman Rizvi Ahmed said.
The government last increased fuel prices in April 2007. World crude oil prices have since more than doubled, costing the country over one billion dollars in subsidies in the fiscal year that ends next Monday.
The latest hike has already led to 20 to 30 per cent rises in inter-district bus fares and truck transport rates, while vegetable and fish prices jumped in Dhaka’s markets, the private Bangla Vision television station said.
A fisherman said the hike in fuel prices was a catastrophe for workers in his sector.
I bought 500 litres of diesel which cost me an extra 7,500 taka (109 dollars), Mostofa Chowhdury, 50, owner of a sea-going fishing trawler, told AFP by telephone from the southern island of Patharghata
Mir Nasir Hossain, a director of the Federation of Bangladesh Chambers of Commerce and Industry, said the price increase was a big blow to industry.
Many businesses will lose competitiveness and some will become loss-making... The government should have done the fuel price rise in phases for the sake of industry, he said.—AFP