The government’s decision to raise fuel prices by Tk20 per litre reflects the pressure created by higher global fuel costs and rising import bills.
The adjustment may help contain subsidies and reduce pressure on public finances while ensuring fuel availability. But the impact will extend beyond filling stations. Higher fuel prices will increase transport costs, raise production expenses for farmers and manufacturers and make the movement of goods more expensive.
For ordinary households, the immediate effect will be higher travel costs and increased prices of essential commodities. The burden will be heavier for low-income families, farmers and small businesses, which have limited ability to absorb additional costs.
A fuel price adjustment may be necessary to manage import costs, but protecting vulnerable groups should remain a priority. The government should introduce temporary targeted cash and food support for poor and low-income households to cushion the inflationary impact.
At the same time, public transport fares need close supervision to prevent unjustified increases that could further strain household budgets. The government should also monitor essential commodity markets and regularly disclose pricing calculations to improve transparency and public confidence.
The challenge now is to balance fiscal reality with social protection. The cost of adjustment should not fall disproportionately on those least able to bear it.
Fahmida Khatun is an economist and a Distinguished Fellow of the Centre for Policy Dialogue.
