Amid soaring crude oil prices, fuel prices have been raised by the Bangladesh government, by between 34-67 per cent, officials say.
Government finances have been stained by the surge of crude oil prices. As a consequence, authorities have said that they have no alternative to the sharp increases.
On Tuesday, the government said that the country can no longer afford to sell petrol, diesel, kerosene and gas at subsidised rates that were set when a barrel of oil cost $60.
“We took the decision to raise fuel prices, finding no other way to reduce revenue losses”, said Mr Tamim, the deputy energy minister in the army-backed government.
Recently, prices of crude have reached record levels above $140 a barrel, and Mr Tamin urged world players to halt the spiraling prices.
“We think rich countries, oil-producing countries and the United Nations should deal with the issue urgently”, he told the AFP news agency.
“Imagine a situation where crude hits 200 dollars a barrel. All development in Bangladesh will stop”, he added.
Bangladesh being one of the poorest countries, where nearly 40 per cent of the 144 million population survive on less than a dollar a day, the price rises are a major blow.
‘Suicidal for the country’
The government last move has been criticised by the country’s major political parties.
“It’s suicidal for the country. Poor people will be hard hit”, said Syed Ashraful Islam, the acting general secretary of the Awami League.
The price hike would be “devastating”, said the Bangladesh Nationalist Party (BNP), which led the most recent elected government.
“We strongly condemn the fuel price hike. The poor and the farmers will be poorer as a result”, said Rizvi Ahmed, a spokesman for the BNP.
The new rates started immediately. Under them, a litre of premium grade gasoline will be raised by 34 per cent to 90 takas ($3.42 per gallon). Diesel and kerosene prices have been raised 37.5 per cent to 55 takas ($3.04 a gallon).
The largest hike, 66,67 per cent, hit liquefied petroleum gas, used mostly for cooking in areas without piped gas supply. Now, a cylinder will cost 1,000 takas ($14.81), instead of 600 takas ($8.89).
Last time fuel prices were raised was in April 2007, but in recent months, transport, commodity and food prices have all increased in Bangladesh.
But despite the price hike, the government will have to spend 100 billion taka ($1.45 billion) on fuel subsidies. It accounts for 40 per cent of the South Asian nation’s development budget.