Fuel price hike: A raw deal for economy and people
What recently happened in the transport sector of Bangladesh after the prices of diesel and kerosene were raised by Tk 15 per litre was truly unprecedented. Except for trains and planes, all public transports disappeared from the streets: buses and trucks stopped running on the roads; launches and steamers were also taken off the river routes. The government announced the fuel price hike on the night of November 3, 2021, and the transport owners' decision to suspend their services came into effect the very next day.
On November 5-6 (Friday and Saturday), there were tests in Dhaka for recruitment in various government offices. Hundreds of thousands of job-seekers, who came to the city to take these tests, suffered immensely because of the unlawful transport strike. The situation was further exacerbated when rickshaw pullers, CNG-powered autorickshaw drivers and other modes of private light vehicles took this as an opportunity to cash in, making the helpless commuters pay at least five times more than the usual fares.
There were many people who were willing to pay the exorbitant fares, but even then, they couldn't get any transport—so many of them had to walk to their destinations. It was a terrible situation, for which no one was ready.
The crisis continued well into the morning of November 7 (Sunday). It wasn't until the afternoon that the situation somewhat eased as some sort of solution was derived from a meeting between the government and the bus service owners. Even then, there were reports of altercations between passengers and bus conductors over the freewheeling hike in fares imposed by the latter.
In the November 7 meeting, the bus service owners and the Bangladesh Road Transport Authority (BRTA), the government regulatory body for road transport, agreed to increase bus fares by 28 percent in Dhaka and Chattogram, but the bus services in Dhaka city were found to be charging 50 percent more than the previous rates. For example, the fare for travelling from Gulistan to Farmgate was Tk 10 on November 3, but the bus operators charged Tk 15 on the same route on November 7 evening. The fare from Gulistan to Abdullahpur was Tk 35 before the price hike, but after the meeting it became Tk 55.
Almost all the short- and long-range buses in the country now run on diesel. So it is natural that an increase in bus fares will follow the diesel price hike, but there is a due process to do that. The fares have to be increased with the permission of the regulatory body. And just as fares cannot be increased without any formal notice, public transport cannot be taken off the roads at one's will. But that is what has happened.
Leaders of the bus owners' association say they did not call the strike, and the bus owners independently decided to stop operating as they were not willing to suffer losses due to the fuel price hike. But the road transport sector is an industry. Can an owner whimsically shut down their company? The BRTA officials should have first sought an explanation from the owners over the unlawful strike in the November 7 meeting. There is no way of knowing if they did do that.
But then, what could the BRTA do when the ministry that is responsible for guiding and supervising the regulatory body kept mum over the issue—at least until the meeting? The concerned minister did nothing more than just appeal to the bus owners to keep their buses running, after the public transport was taken off the roads on November 4. He holds an influential post in the ruling party, second only to the prime minister. But is there any reflection of that authority in the management of an important ministry like road transport?
Everyone knows that he is on good terms with the leaders of the associations of bus owners and workers. No doubt, such good terms are useful in running the transport sector. But what is worrying is that the last word, as has been seen on various occasions so far, on any road transport issue, comes not from the government, but the bus owners and transport leaders.
In this connection, one can recall what happened to the road transport law that has been faced with trouble after trouble. After almost a decade's worth of efforts, the law was passed in 2018, although it was announced to be implemented a year later. Representatives of both the government and civil society said then that if the law was implemented, the prevalent unruliness on our roads would come under control to a large extent. But the initiative to enforce the law stumbled in the face of obstacles from transport leaders. It was then said by the ministry high-ups that it would be implemented "soon" after discussions with every stakeholder. That soon has yet to come! The good terms between the road transport minister and the leaders of the bus owners' association could not end the stalemate over the law, which is much coveted by the conscious section of society.
One may be forgiven for asking: If the words of the transport owners and workers are considered final when it comes to making decisions relevant to the road transport sector, then what is the rationale behind having a minister, whose purpose is to protect public interests and to supervise the sector?
The way the diesel price has been increased is also indicative of the fact that the government is not people-friendly. There is no denying that the excessive rise in fuel prices in the international market will have an impact on the local fuel prices. But that does not necessitate an increase of Tk 15 per litre at one go. The government may have thought that if the price of a litre of diesel is increased by Tk 15, it will receive public criticism no less than that triggered by an increase of Tk 5. It may also have assumed that if the fuel price is increased bit by bit, the criticism may continue much longer than that resulting from a higher increase at one go.
Regardless of what the government may have surmised about the situation, it must be acknowledged that it was not the right time to make the move. The country's economy has just begun to turn around to recover from the devastating effects of the Covid-19 pandemic. The pandemic, the worst public health crisis in a century, has wreaked havoc, especially on small- and middle-income people who lost either their jobs or businesses. They are now in the process of recovery. Raising fuel prices is bound to make this process difficult. It should be noted that the detrimental effects of raising fuel oil prices are ubiquitous. On the one hand, it raises the prices of all kinds of essential goods, and on the other hand, it increases the cost of living by increasing house rents and travel expenses.
Those who say that the country's per capita income has increased even during the pandemic need to remember that the current system of measuring per capita income is not indicative of an equal increase of income for everyone. The income of a section of people—mostly the better-off ones—has indeed increased, because of which the number of new millionaires in the country has also gone up in recent times. But, at the same time, a large part of the population has lost their income, which is not reflected well in the calculation of the per capita income growth.
Fuel prices have been low in the international market for the last seven years. So, the Bangladesh Petroleum Corporation (BPC) has made a huge amount of profit during the period—so much so that the government has been able to realise the entire subsidy given to the corporation on earlier occasions. In this situation, the government could easily provide some subsidy to the energy sector for six months or a year more. By that time, the economy might regain its normal speed, while people might also get some relief.
Saifur Rahman Tapan is a freelance journalist.