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Bangladesh Raises Fuel Prices by Up to 67 Percent

  • VOA News

Bangladesh's government has raised fuel prices by between 34 to 67 percent Tuesday, hitting hard poor people, most of whom live on less than one dollar a day.

Under the new rates, a liter of gasoline will now cost 34 percent more, or three dollars and 42 cents per gallon.

Diesel and kerosene went up 37-and-a-half percent, to three dollars and four cents a gallon.

But liquified petroleum gas used for cooking saw the largest hike of almost 67 percent, with a cylinder now costing almost 15 dollars, compared to eight dollars and 89 cents before the price increase.

Bangladesh's Deputy Energy Minister M. Tamin said the government had no choice because the country could no longer afford to sell various fuels at subsidized rates set when a barrel of oil cost just about 60 dollars. Recently, crude has spiked above 140 dollars a barrel.

Bangladesh is already fighting soaring food prices that have risen dramatically following last November's deadly cyclone Sidr, which destroyed about two million tons of rice.

The United States announced recently it would give Bangladesh about 40-million dollars in food aid.

Meanwhile, economists say that it will further increase inflation as well as huge burden on the general people and to the farmers.

Our reporter from Dhaka, Amir Khasru interviewed Dr Mustafizur Rahman, Executive Director of Center for policy dialogue (CPD) and Dr Sajjad Zahir, Director, Economic Research Group (ERG) regarding the impact of this oil price hike. Both these organizations are independent think tank.

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