Fuel Price Hike in Bangladesh Is ‘Modest’: Muktadir

Commerce Minister Khandakar Abdul Muktadir at parliament

Commerce Minister Khandakar Abdul Muktadir told Parliament on Monday that the recent increase in fuel oil prices in Bangladesh is “modest” and is unlikely to have a significant impact on overall inflation, even amid ongoing global uncertainty linked to tensions in the Middle East.

He made the remarks while responding to a supplementary question from independent lawmaker Rumeen Farhana (Brahmanbaria-2) in the House.

The minister said the impact of fuel price changes on inflation, particularly food inflation, remains limited. While global fuel prices have risen sharply, he said Bangladesh has seen only a moderate adjustment in comparison.

He noted that in several countries, including the United States, fuel prices have increased significantly, in some cases rising from around $2.70–$2.80 per gallon to over $5 due to market conditions and tax-related factors.

In Bangladesh, however, fuel pricing is not fully automatic and is adjusted carefully by the government to maintain economic stability, he added.

Explaining the broader impact, he said fuel costs account for only about 7 to 8 percent of production costs in the manufacturing sector. As a result, even when fuel prices rise, the overall effect on production costs and inflation remains relatively small.

He gave an example from the transport sector, saying a bus travelling 200 kilometres consumes around 25–30 litres of diesel. Even after a price increase, the additional cost per trip, when distributed across large cargo loads such as 10,000 kilograms of goods, results in only a minimal rise per unit.

“So, while fuel price hikes may appear significant, their actual contribution to inflationary pressure is not as large as commonly assumed,” he said.

The minister further said the government is maintaining a cautious approach to ensure economic stability and prevent imbalances in key sectors.

He added that fuel price adjustments in Bangladesh are being made in line with global trends in a “measured and moderate” way.

Muktadir also assured lawmakers that the government is closely monitoring inflation and will take necessary steps to keep it under control.