Fuel price hike expected to ripple through the economy; bus fares already up at Gabtoli

The government's latest increase in fuel prices is set to ripple across the economy, according to experts quoted by The Daily Star, who warn it threatens to rekindle inflation just as price growth had begun to ease.

The effects are already visible on the road. The day after diesel prices were raised, passengers at the capital's Gabtoli bus terminal were being charged Tk 50 to Tk 100 more per journey depending on the distance, Prothom Alo reports from the terminal. Transport costs for goods are rising as well; the paper cites a rice mill owner in Kushtia who had been paying Tk 20,000 to move a truckload of rice to Dhaka before the increase.

The pricing decision is also drawing criticism over how diesel is taxed. The government collects as much as 25 percent in tariffs and other taxes on diesel imports, The Daily Star reports, prompting analysts to call for those taxes to be waived instead of passing higher prices on to consumers already squeezed by inflation.