Commerce Minister Khandakar Abdul Muktadir on Monday said the recent fuel price hike will not trigger inflation, as the adjustment was kept at a moderate level.
He made the remarks in parliament while replying to a question from independent lawmaker Rumeen Farhana.
Comparing to the global surge in fuel prices, Bangladesh's increase has been relatively moderate, he said, "For example, diesel has gone from Tk 100 to Tk 115 per litre. In an industrial plant, fuel accounts for about 7-8 percent of production costs. If the price of diesel rises by 15 percent, the impact on overall costs remains minimal."
Muktadir said that in the transport sector, a bus covering 200 kilometres consumes around 25-30 litres of diesel. The extra cost of about Tk 450 for those 30 litres, when spread across 10,000 kilograms of goods in a truck, adds only a negligible burden per unit.
"This means that while fuel prices have risen, the effect on inflation is not as dramatic as it may seem. The economy's fundamental balance remains intact. Like other countries, Bangladesh has adopted a moderate policy, keeping the increase modest," he added.
The minister also noted that in the United States, fuel prices vary from state to state due to local taxes. Before the war in the Middle East, many US states had fuel prices around $2.70-$2.80 per gallon, which later rose to over $5.
He further said that, compared with neighbouring countries and similar economies, petroleum prices have risen more sharply elsewhere, adding that in many countries fuel prices are adjusted automatically without requiring direct government intervention
Responding to a starred question from independent member Rumeen Farhana, the minister also said, Bangladesh currently operates 24 commercial wings in 21 countries across the world to promote and expand exports.
The commercial wings are located in Brussels, Paris, Berlin, Madrid, Geneva, London, Moscow, Ankara, Canberra, Ottawa, Washington DC, Los Angeles, Beijing, Kunming, New Delhi, Kolkata, Tehran, Tokyo, Jeddah, Brasilia, Kuala Lumpur, Seoul, Singapore, and Dubai.
Replying to a question of Pabna-5 MP Shamsur Rahman Shimul Biswas, the minister said ongoing geopolitical tensions in the Middle East, may have potential impacts on global economy and trade while Bangladesh is not an exception to that.
He said the Middle East is a significant trading partner for Bangladesh while the country exports ready-made garments (RMG), pharmaceuticals, frozen foods, leather and leather goods to markets such as the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, and Oman.
He noted that the current instability could lead to rising fuel prices, increased import costs, higher shipping and insurance expenses, possible decline in exports to Middle Eastern markets, price hikes of commodities, and potential challenges in remittance inflows.
"To tackle the situation, the government has undertaken a series of measures under the directive of the Prime Minister," he added.
