The gas price increase in June and the fuel oil price hike on Saturday will have an immediate negative impact on transportation, essential commodities, and electricity, said the Dhaka Chamber of Commerce and Industry (DCCI) on Sunday.
The government increased the price of all refined fuel oil products by 42.5% to 52% on Saturday, where the price of petrol and octane increased 51.1% and 51.7%, respectively.
Diesel is the most consumed fuel in the country, accounting for around 73% of the country's total fuel consumption. Around 90% of the transportation sector is dependent on diesel. Octane and petrol-powered vehicles will also have to bear the increased cost, said DCCI in a press statement, adding, "This will also increase domestic freight cost and will eventually lead to higher prices of essentials across the country."
The government has increased the price of all fuels despite the gradual fall in global energy prices in recent times, according to the DCCI.
The chamber feels that another major impact will be on the production cost of agricultural products as diesel is widely used for irrigation purposes.
"Recurring fuel and fertiliser price hikes will directly impact the production cost of agricultural products and gradually hamper food security and inflict further misery on public lives," said the chamber.
Manufacturing industries are already suffering due to electricity rationing as diesel and liquefied natural gas prices went high globally.
The chamber predicts a domino effect on the entire economy due to the price hike of fuel, in addition to the recent price hike of natural gas.
The cumulative impact of the price hike of fuel will cause inflationary pressure on the economy, raising the operating cost of all energy-dependent businesses and industries, the chamber warned.
It recommended austerity in consumption and reduction in fuel pricing as soon as it comes down in the international market given its negative impact on the economy, and said, "For ensuring long-term energy security, we need to frame out a long-term strategy as well as continue onshore and offshore gas exploration, assess energy mix and cost, and have more energy efficient electricity generation."