Fuel price hike in Bangladesh ‘modest’, unlikely to drive inflation: Muktadir

Commerce Minister Khandakar Abdul Muktadir told parliament on Monday that the recent increase in fuel prices in Bangladesh is absolutely “modest”, while it is unlikely to significantly drive inflation in the country amid the tension in the Middle East.

The minister said this while replying to a supplementary question from independent lawmaker Rumeen Farhana (Brahmanbaria-2) in the House.

He said that the actual impact on overall inflation—particularly food inflation—remains limited.

He explained that although fuel prices have surged globally, Bangladesh has experienced a comparatively moderate increase. In many countries, including the United States, fuel prices have risen sharply, in some cases from around $2.70–$2.80 per gallon to over $5, largely due to market-driven and tax-related adjustments.

The minister emphasised that in Bangladesh, fuel price adjustments are not fully automatic and are carefully managed by the government.

He noted that in the manufacturing sector, fuel costs typically account for only about 7% to 8% of total production costs. Even if fuel prices rise, the overall impact on production costs—and consequently on inflation—is relatively small.

Providing an example, he said a bus travelling 200 kilometres consumes around 25-30 litres of diesel. Even with a price increase, the additional cost, when distributed across transported goods for a truck —such as 10,000 kilograms of cargo — results in only a marginal increase per unit.

“So, while fuel price hikes may appear significant at first glance, their direct contribution to inflationary pressure is not as substantial as commonly perceived,” he added.

The minister further stated that the government remains cautious to ensure that economic fundamentals do not become imbalanced.

“Bangladesh has followed a measured and moderate approach in adjusting fuel prices, in line with global trends, to maintain economic stability,” he added.

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