Impact on inflation ‘minimal’ Commerce Minister

The government has sought to reassure that the recent increase in fuel prices will not sharply accelerate inflation, despite mounting concerns over rising living costs and global energy uncertainty.

Commerce Minister Khandakar Abdul Muktadir told Parliament on Monday that the overall impact of the price adjustment on production and transport
costs would remain limited.

His remarks came during a question-and-answer session, where opposition MP Rumeen Farhana raised concerns over persistent inflation — still above 9 per cent after a prolonged period in double digits — and the potential fallout from global energy instability, including tensions involving the United States and Iran.

In response, the minister argued that Bangladesh’s fuel price increase was modest compared with global trends and would not significantly drive inflation.

He noted that fuel prices have risen more sharply in several countries, including the United States, where prices — varying by state due to taxation — have exceeded $5 per gallon in some areas.

He added that many countries follow automatic pricing mechanisms linked to global markets, unlike Bangladesh’s more controlled system.

Explaining the domestic impact, the minister said diesel prices had risen by around 15 per cent, from Tk100 to Tk115 per litre.

However, he emphasised that fuel typically accounts for only 7–8 per cent of production costs in many industries, limiting its overall effect on manufacturing.

He further argued that the impact on transport costs per unit of goods remains relatively small.

For instance, a truck consuming about 30 litres of diesel for a 200-kilometre journey can carry roughly 10,000 kilograms of goods, meaning the increase in per-unit transport cost is unlikely to be significant.

“While fuel prices have risen, the effect on overall inflation is not strong enough to destabilise the economy,” he said, adding that similar adjustments are being made globally in response to market conditions.

The minister also informed Parliament that the government has stepped up efforts to secure energy supplies amid global disruptions. Bangladesh is importing fuel from countries including India and Russia to ease supply pressures.

In addition, imports of essential commodities have been increased to maintain supply and help stabilise prices.

The government is also pursuing broader economic strategies, including expanding export markets and strengthening trade and investment ties through bilateral and multilateral free trade agreements across Asia, Europe, Africa and the Middle East.

These initiatives, the minister said, are aimed at reducing tariffs, removing trade barriers and improving market access to support long-term economic growth and diversification.

The parliamentary session, part of the 17th day of the first sitting of the 13th Parliament, was chaired by Deputy Speaker Kaysar Kamal.

Last week, the government raised retail fuel prices, with diesel increased by Tk15 per litre, octane by Tk20, petrol by Tk19 and kerosene by Tk18, citing rising global oil prices.