The Middle East crisis has pushed up global fuel prices, forcing Bangladesh to import oil, diesel, octane and liquefied natural gas at significantly higher prices.
Experts said the unchanged retail prices of oil and gas are offering a short term relief to the consumers, while the building pressure on the treasury is making price hikes inevitable if the global prices do not calm down soon.
To cushion consumers from immediate shocks, the government has expanded subsidies, though economists warn the approach will strain the budget and foreign exchange reserves.
Reserves stood at $34.43 billion on Thursday, down from $35.11 billion at the end of February, adding to pressure on external balances.
“Prices would have raised overall costs if adjusted now, so avoiding a hike is reasonable as a short-term step,” said Centre for Policy Dialogue Distinguished Fellow Professor Mustafizur Rahman.
He said the subsidy is partly funded by earlier surplus when fuel prices were higher than costs.
“If this continues for another three to four weeks, the fiscal burden will rise and price adjustments may become unavoidable,” he added.
Dhaka University Economics Professor Rumana Huque said subsidies must be paired with strict market monitoring.
“Providing subsidies is a heavy burden, and misuse such as hoarding could prevent consumers from benefiting,” she said.
She added that sudden price hikes would hurt exporters already tied to prior contracts.
“The government may consult producers to avoid abrupt increases and maintain short-term competitiveness,” she said.
However, she warned that if high prices persist, adjustments aligned with regional benchmarks may be required.
Finance and Planning Minister Amir Khosru Mahmud Chowdhury said continued high-cost imports would erode public funds.
“If the government continues to procure fuel at elevated prices, it will disrupt development and social safety net programmes, making price adjustment inevitable,” he said.
The subsidy bill from March to June is projected at Tk31,122 crore, with about Tk167 crore spent daily, implying a monthly outlay exceeding Tk5,000 crore to keep prices stable.
