Bangladesh Raises Gas Prices by 179%, Fearing Rise in Inflation

Bangladesh Raises Gas Prices for the Power Plants: Raising Fears of a New Inflation Spur

The government of Bangladesh has issued a measure from February 1,2023, raising the price of gas for power plants from 5.02 Taka ($0.05) per cubic meter to 14 Taka ($0.13) per cubic meter, as well as a 30 Taka ($0.29) per cubic meter price for internal use and large industries, implying an increase of 88% and 155%, respectively.

The Ministry of Energy of Bangladesh stated that the prices of gas for households, the tea industry, compressed natural gas and fertilizer factories remain unchanged. However, it still alerted economists and consumers of the new rise in inflation, which already reached 8.71% in December 2021, according to the Bangladesh Bureau of Statistics.

Khondaker Golam Moazzem, director of research at the Center for Policy Dialogue told EFE that, though not receiving a guarantee, in recent negotiations with the government, businessmen insinuated that they would pay the highest price if uninterrupted gas supplies were guaranteed.

President of the Consumers Association of Bangladesh, Ghulam Rahman, also stated his fear that consumers will end up assuming this increase in additional gas prices, further fueling inflation.

A similar situation occurred last August, when the authorities increased fuel prices by 51%, urging the inflation to increase to 9.52% compared to 5.54% in 2021. Bangladesh is currently in negotiations with the International Monetary Fund (IMF) for a $4.5 billion credit plan.

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