Proposal for gas price hike

Any increase in utility prices should be rational and there must be a reasonable gap between two hikes

Right after the formation of the government in the beginning of the new year, proposal of gas distributing companies to increase gas price by 60 per cent has not gone well with the cross sections of people. It was only in February 2017, gas price was hiked by an average of 22.7 per cent.

Though a proposal is still a proposal and the Bangladesh Energy Regulatory Commission (BERC) would hold round of hearing on the issue of price hike next month, if ultimately a 60 per cent increase is slapped, there are hundreds and thousands of gas users who would be hit hard. Poor people would really find it difficult to manage their daily budget with price of domestic gas connection at Tk.1,200 from Tk. 850 for two burners and Tk. 1,000 from Tk. 800 for a single burner.

It is true that per capita income of the country is increasing with the rise in GDP growth; there is also the other side of the picture that the beneficiary of this growth is the society’s richer section of people than the poor ones.

Not long ago, we had a report, from a New York-based research firm Wealth-X, that Bangladesh has topped the list of countries that saw the quickest growth in the number of ultra-wealthy people between 2012 and 2017 surpassing even China, India and US as well. This does not bode well for the overall economy of the country.

However, according to a report of this newspaper Tuesday, increasing gas price has become essential because the government needs to subsidize the present high price of liquefied natural gas (LNG). Despite the reality that Bangladesh has embraced a free market economy, the fact remains that it is also a welfare state and the state has a responsibility to serve the poorer section of people, if necessary, by giving subsidy to the relevant sector. Excessively taxing the poor is not a good idea for Bangladesh.  

Rather, the government should find ways how it can tax the rich people more for running the government and the utility services that it provides to all citizens. This does not mean that we are not in favour of any increase in the charge of utility services at all. Far from it, this increase must be rational and there must be a long gap between two hikes.      

 

Proposal for gas price hike

Any increase in utility prices should be rational and there must be a reasonable gap between two hikes

Right after the formation of the government in the beginning of the new year, proposal of gas distributing companies to increase gas price by 60 per cent has not gone well with the cross sections of people. It was only in February 2017, gas price was hiked by an average of 22.7 per cent. Though a proposal is still a proposal and the Bangladesh Energy Regulatory Commission (BERC) would hold round of hearing on the issue of price hike next month, if ultimately a 60 per cent increase is slapped, there are hundreds and thousands of gas users who would be hit hard. Poor people would really find it difficult to manage their daily budget with price of domestic gas connection at Tk.1,200 from Tk. 850 for two burners and Tk. 1,000 from Tk. 800 for a single burner. It is true that per capita income of the country is increasing with the rise in GDP growth; there is also the other side of the picture that the beneficiary of this growth is the societys richer section of people than the poor ones. Not long ago, we had a report, from a New York-based research firm Wealth-X, that Bangladesh has topped the list of countries that saw the quickest growth in the number of ultra-wealthy people between 2012 and 2017 surpassing even China, India and US as well. This does not bode well for the overall economy of the country. However, according to a report of this newspaper Tuesday, increasing gas price has become essential because the government needs to subsidize the present high price of liquefied natural gas (LNG). Despite the reality that Bangladesh has embraced a free market economy, the fact remains that it is also a welfare state and the state has a responsibility to serve the poorer section of people, if necessary, by giving subsidy to the relevant sector. Excessively taxing the poor is not a good idea for Bangladesh. Rather, the government should find ways how it can tax the rich people more for running the government and the utility services that it provides to all citizens. This does not mean that we are not in favour of any increase in the charge of utility services at all. Far from it, this increase must be rational and there must be a long gap between two hikes.