Another hike unjustified

With the public hearing regarding another round of gas price increase underway, businesses have already expressed their concerns about its possible impacts. The hike may also affect transportation costs, cost of electricity production, cost of living and of essential commodities, according to the Dhaka Chamber of Commerce, increasing economic sufferings for citizens in the process.

Spinners, textile millers, gas station owners and others have already called on the government to leave the price be as it is. With the recent slump in economic activities arising from the Gulshan attack, businesses rightly fear that another price hike will have a massive negative impact on their profitability, leave them struggling against foreign competitors on the international market and cause them to lose market share. Domestic increases in the price of commodities forced on by a price hike, on the other hand, may redouble financial burdens on citizens.

The authorities concerned should clearly not let that happen. Moreover, with the government increasing prices only as recently as last September, and a number of times over the past years, it is difficult to justify another round of price hike particularly given the dull business environment. Thus, whatever benefit, if any, the government may accrue from an increase will irrefutably be negated by the costs arising from it for businesses and citizens alike.

The government should, under the circumstances, not go ahead with the proposed price increase. Instead, with prices on the international market being low, it could look to import low cost fuel as suggested by the DCCI.