Dhaka: Commerce Minister Khandakar Abdul Muktadir addressed Parliament: The recent increase in fuel prices in Bangladesh, influenced by global instability due to tensions in the Middle East, is described as ‘modest’ and is unlikely to significantly accelerate inflation.
According to United News of Bangladesh, in response to a question from independent lawmaker Rumeen Farhana, Muktadir explained that Bangladesh’s approach to fuel price adjustments is carefully managed, keeping them moderate compared to the sharp increases seen in many other countries. He emphasized that the impact on overall inflation, particularly food inflation, remains limited due to fuel’s relatively small share in production costs.
Muktadir pointed out that while in countries like the United States, fuel prices have surged significantly, Bangladesh’s adjustments are not automatic and are controlled by the government. He provided an example of how the additional cost of increased fuel prices results in only a marginal rise in per-unit transportation cost for cargo, suggesting that the direct contribution to inflationary pressure is not as substantial as perceived.
The minister assured Parliament that the government is vigilant in maintaining economic stability and is actively monitoring inflation to keep it under control. In response to another question from lawmaker Md Shamsur Rahman Shimul Biswas, Muktadir acknowledged the potential impacts of Middle Eastern geopolitical tensions on the global economy and trade, noting that Bangladesh is not exempt from these effects.
Muktadir highlighted the Middle East’s role as a significant trade partner for Bangladesh, where the country exports various goods including ready-made garments and pharmaceuticals. He warned that the current instability could lead to increased fuel prices, higher import costs, and potential challenges in exports and remittance inflows.
To address these challenges, the government has implemented measures to diversify export markets, aiming to expand trade with countries like India and ASEAN nations. The minister also stated that efforts are in place to broaden the export basket beyond RMG to include other products like pharmaceuticals and ICT goods.
He discussed ongoing trade negotiations, including major agreements like the Bangladesh-Korea CEPA and Bangladesh-Singapore FTA, and mentioned the signing of an EPA with Japan. Muktadir detailed the government’s strategic measures, including austerity efforts, to maintain economic stability.
In another response to Rumeen Farhana, the minister outlined the government’s focus on reducing logistics costs, improving port efficiency, and expanding export markets beyond conflict zones. He emphasized the importance of reducing tariffs on RMG exports, which account for a significant portion of Bangladesh’s exports.
Muktadir concluded by mentioning the operation of 24 commercial wings in 21 countries to promote exports, demonstrating the government’s commitment to enhancing trade and investment ties globally.