The New Nation - Internet Edition

GOVERNMENT leaders in Bangladesh have justified the rising prices of commodities sold in local markets on their higher procurement costs in international markets. But free market principles do not say that prices should remain at inflated levels notwithstanding their decrease in the international markets. But this is found to be the case always in Bangladesh. For example, prices of fuel oils are fixed by the government because the import and distribution of these oils are entirely government-managed operations. Government adjusted upward fuel oil prices several times over the last 20 months and the last such revision was particularly one, some 40 per cent.

The government's main ground for the upping of the fuel oil prices was that huge subsidies were being borne by it for importing the same with escalating prices from international markets and then selling them at much lower prices in the local markets. And government could no more bear greater subsidy burdens. International price of oil was some $147 per barrel when its price in Bangladesh was last raised. Oil price since then has gone on falling. It dipped to $ 80 per barrel about a fortnight ago and has been rising slowly since then. The international prices have been significantly on the lower side since the last major upward increase of fuel oil prices. The fall in prices of fuel oils in international markets have not led to any downward readjustment of their prices in our local markets. This raises the question of why it should be so. Decrease in prices of fuel oil thus merits the government's highest consideration because centering on such higher fuel oil prices the Bangladesh economy has been suffering from higher inflation and greater consumer sufferings.