Faruque Ahmed
The government is quite unjustifiably realizing higher fuel prices in a tentative policy outlook punctuated by half-hearted assurances by Finance Minister AMA Muhith that he would reduce it but repeatedly ignoring it during the past one year. The consumers feel that perhaps he is joking with them by ignoring his own statements and continuing to charge unreasonable prices to fund his ambitious budgetary deficits.
But people are seemingly getting restive thinking that there is a limit to the waiting game while the range of price differential is so high forcing industrialists, transport owners and private users to pay at previous prices when the oil prices have crashed to one third at $35 per barrel at global spot markets from its peak at $105 in 2013.
Muhith’s procrastination
Economists and business leaders say it is simply unjustified and the finance minister must stop exploiting the people when he is expected to protect their interest as a senior government leader as well as the custodian of the nation’s exchequer.
But his policy actions have clearly shown that he is not interested to protect the people’s interest while using his power and national resources to appease bureaucracy by almost doubling their salaries that the economy can hardly afford.
So the finance minister has been wavering with his assurances. Only on January 3 he assured the leaders of the Metropolitan Chamber of Commerce and Industry (MCCI) at a meeting at his secretariat office that a decision to cut the fuel price would be taken soon. But the next day he reportedly avoided placing the proposal before the cabinet committee as it was scheduled to take a final decision on it.
The MCCI leaders demanded immediate cut in fuel oil prices in line with the prevailing global prices. Such demands also have been made by other chambers and trade associations like Dhaka Chamber of Commerce and Industry (DCCI), the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), Bangladesh Chamber of Industries on many occasions.
The finance minister also assured the nation in May last year at a pre-budget discussions that “Bangladesh will take up the opportunity of low fuel oil prices in international markets to adjust prices at home,” but he always avoided any firm decision.
After the budget announcement, he came up again with the suggestion on several occasions that he would reduce the fuel price. His assurances continued to come in and gone in regular intervals but the consumers’ sufferings continued unabated. Mentionable that Bangladesh is perhaps the lone country which is depriving its own citizens while other countries have already put in place a downward adjustment in fuel prices benefiting their people.
Lopsided argument
Even all regional countries have already adjusted the fuel prices much ago.
The price fall exceeded 50 percent reportedly on most oil products in Pakistan; the country where the government is adjusting fuel prices on a monthly basis and extending lower tariff benefits in electricity bills to consumers. India too, adjusted its fuel prices 22 times in recent past to constantly reflect the global price at domestic price, so that the domestic producers and farmers get the maximum benefit of lower input costs. The Sri Lankan government also reduced oil prices and activated a formula to constantly adjust local price with international price to benefit its citizens.
Reports say these are not isolated incidents in just India, Pakistan or Sri Lanka; it is true of all the consumers all over the world, except Bangladesh. The government appears here least bothered about adjusting fuel prices in line with the international market price.
The government has always adjusting fuel price upward in the past in domestic market as it surged in the global markets. It blamed the World Bank and IMF every time for the rise but when they are being asked for a downward adjustment in domestic pricing this time, the government is quite defiant. MCCI president Syed Nasim Manzur said the government is depriving the consumers from their due benefits. He called upon the authorities to review the pricing saying a downward adjustment in fuel prices would benefit industrial consumers to reduce cost of doing business and raise export competitiveness. Reduced transport cost would also reduce commodity prices.
“Consumers here remained deprived of the benefits of falling oil prices,” Ahsan H Mansur, executive director of Policy Research Institute said and made similar arguments that a downward adjustment in fuel price would be helpful to national economy.
The finance minister made no secret of the fact that he was charging higher fuel price to recover the losses that the state run Bangladesh Petroleum Corporation (BPC) incurred over the past years from higher import cost of fuel oil.
Govt. needs reconciliation
The BPC trade figures show that it has slowly recovered from a biggest loss of Tk 11371 crore in 2011-12 to earning a profit of Tk 5268 crore in 2014-15. But the finance minister still favours charging higher fuel price to make profit and meet the budget deficits.
Incidentally, the Centre for Policy Dialogue (CPD) estimated that a 10 percent cut in fuel price may raise 0.2 percent GDP growth, readymade garment exports by 0.4 percent and consumers demand by 0.6 percent. The new cycle of upward economic activities would also spur new investment and income generating activities, which is much needed now to overcome sluggish economic growth. Meanwhile, the new pay scale has triggered a new crisis within the government. The finance minister needs more money to pay bureaucrats, but except the administrative cadre officials, officers of 26 other cadres, including the public university teachers are blaming the government for discrimination against them in the new pay scale and have given call for agitation.
University teachers are going for indefinite strike from January 11 while government college teachers have already gone on strike to force the government to concede to their demands. The crisis is seemingly deepening and the government needs to take a fresh look at all those issues for reconciliation.
Source: Weekly Holiday