The recent 17 percent increase in fuel prices amid rising global energy volatility triggered by Middle East tensions is expected to place widespread pressure on Bangladesh's economy, affecting transport, agriculture, industry, and overall inflation, experts and stakeholders have warned.
Economists say the latest adjustment in petroleum prices will not only increase costs across sectors but also gradually erode purchasing power and slow down economic growth. A senior economist quoted by The Daily Industry said, "Fuel price hikes do not remain confined to transport alone. They spread across the entire production and supply chain, eventually fueling inflation and reducing consumer demand."
LPG Price Surge Adds Further Pressure: Adding to the burden, liquefied petroleum gas (LPG) prices in the private sector have increased for the second time in a single month. The price per kilogram rose by Tk 17.62, following a previous hike of Tk 32.30 in early April.
As a result, the price of a 12-kg LPG cylinder has jumped from Tk 1,728 to Tk 1,940, an increase of Tk 212. Energy analysts warn that this sharp rise will directly impact household budgets as well as production, transport, and retail costs. Agriculture and Transport Hit Hard: The fuel price increase is expected to significantly affect Bangladesh's agriculture sector, which is heavily dependent on diesel. Of the country's estimated annual diesel demand of 4.35 million tons, around 1.044 million tons is used in agriculture alone.
With around 80 percent of irrigation systems running on diesel, farmers are already facing rising production costs. Officials estimate that the latest price hike could increase agricultural expenses by nearly Tk 15 billion. Transport operators have also demanded a fare increase of up to 40 percent, citing rising fuel costs.
Industry Leaders Warn of Rising Costs: Business leaders say the impact will be felt across manufacturing and export sectors. Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) President Mohammad Hatem told The Daily Industry that rising fuel prices will increase production costs across industries.
"Energy price hikes will definitely impact industry and exports. Production costs will go up. However, at this stage, ensuring stable supply is even more important than price stability," he said.
Inflationary Pressure Expected to Rise: Consumer rights groups have also warned of broader inflationary consequences. SM Nazer Hossain, Vice President of Consumers Association of Bangladesh (CAB), told The Daily Industry that fuel traders and business groups had been pressuring the government for price adjustments. "Fuel is directly linked with all essential goods. Once fuel prices rise, everything becomes more expensive, and ordinary people suffer the most," he said.
Supply Chain Weakness Highlighted: Dhaka Chamber of Commerce and Industry (DCCI) President Taskin Ahmed said fuel price increases were predictable given global market conditions, but stressed that supply chain management remains a key concern.
He told The Daily Industry, "Price increases will affect industry and inflation, that is expected. But ensuring uninterrupted supply is crucial. We still see long queues at petrol pumps, which indicates weaknesses in distribution."
He urged stricter monitoring of fuel stock, distribution systems, and supply chain management. Government Defends Decision: Finance and Planning Minister Amir Khasru Mahmud Chowdhury defended the price adjustment, citing global market instability.
Speaking to The Daily Industry, he said, "Fuel prices have increased globally. In the US, prices have doubled, and in Sri Lanka they have risen by 25 percent. Despite pressure on the national fund, we kept prices stable for as long as possible in the interest of the public."
He added that the adjustment was minimal and necessary to support budget management and economic programs. On inflation concerns, the minister said fuel represents only a small portion of the overall economic basket, and inflation depends largely on supply and demand dynamics.
Economic Outlook: Experts, however, warn that even a "small" increase in fuel costs can have a cascading effect on the economy, given Bangladesh's heavy reliance on imported energy.
With transport costs rising, agricultural production becoming more expensive, and industrial output under pressure, analysts believe inflationary trends may strengthen in the coming months.
A senior economic analyst told The Daily Industry, "The challenge is not just global price volatility, but how efficiently domestic systems absorb and manage that shock. Without proper management, the burden ultimately falls on consumers." As fuel and LPG prices continue to rise, concerns are growing that inflationary pressure could deepen, further squeezing household incomes and slowing overall economic momentum.
