Fuel price rise!!!

The government raised the fuel price by Tk 5.0, for the fourth time since May 2011to cut subsidy.

Here is an update on it from the Reuters.

Implication? No doubt, it will add to persistently high level of inflation immediately, apart from reducing the government's burden. Exporters (or, producers) are worried about rising production cost of their exporting products. Analysts talk on rising transportation cost, and thus people will have to face higher transportation bill, which will consequently reduce their real income.

Now, the message is clear that the government targeted higher growth with the cost of higher inflation. It is not in a position to reduce budget expenditure, but to reduce subsidy. It is not in a position to reduce oil import, but to continue providing oil to quick rental power plants with subsidized prices. Which one is good for the government as a political agenda? To show that higher growth has achieved under this period, or people were happy in terms of experiencing lower commodity prices?

Here is a good report from bdnews24 on the issue.