Bangladesh's 20-taka fuel hike must be shared, says a Dhaka economist

Summary

Fahmida Khatun is a distinguished fellow at the Centre for Policy Dialogue (CPD) in Dhaka and was its executive director from 2017 to August 2026. In an interview with the Bengali daily Jatiyo Arthoniti on 26 September 2026, republished by CPD, she assesses the government's fuel price increase. The government raised the price of diesel, petrol, octane and kerosene by 20 taka a litre at once. According to the local press, diesel went from 115 to 135 taka. Khatun says an adjustment was necessary because oil prices, freight and insurance, and the taka's depreciation had widened the losses of the state company BPC. But she sees a one-off rise of 20 taka during a period of high inflation as a heavy blow. Tax cuts and a gradual transition, she says, should have been tried.

Khatun stresses that raising all 4 fuels by the same amount does not have the same effect. Diesel hits agriculture, public transport and freight directly, while kerosene hits poor rural households. She says second-round effects will spread to rice, vegetables, fish and building materials within a few weeks to a few months, and that prices do not come down once they have risen. 5 proposals stand out: a line-by-line disclosure of the pricing formula, a 3-month average instead of a monthly one, a price stabilisation fund, independent audits of BPC's accounts, and time-limited direct cash support for low-income households. In her view, monetary policy alone cannot stop this cost-driven inflation. The burden should be shared between the state, energy companies, businesses and consumers.