Column by Mahfuz Anam: Why is public convenience an alien concept for our decision-makers?
Starting from unannounced road blocks forcing commuters into hours of traffic congestion, to making important arterial roads off limits for visiting foreign guests, to cutting off gas and power for maintenance work without prior information, to unreasonable diversion of traffic for megaprojects, to frequent government price hikes of essentials—all are done without an iota of consideration for public convenience, leave alone rights. Much of the frustrations of ordinary people could be handled better only if public rights and the government's obligation to citizens were at all on the radar of our bureaucrats and planners.
It is true that governments often need to take unpopular decisions. Among them, raising prices of essentials is the most troubling both for the government and the citizens. For the former, it leads to an immediate decrease in popularity and general unrest, and for the latter, an increased economic burden, making life more difficult to bear.
A good example of that is the government's decision to raise fuel prices on November 3. On that day, the government raised the prices of diesel and kerosene by 23 percent, from Tk 65 to Tk 80—two items that directly impact the economy and the lives of the most disadvantaged segment of society. The total consumption of diesel is four million tonnes, 70 percent of which is used by the transport sector and 20 percent by the farmers. Kerosene's total demand is 100,000 tonnes, mainly used for cooking, lighting and aviation fuel.
Two reasons were given for the rise: One, too great a price difference between India and ourselves will lead to fuel smuggling. How will this be stopped with diesel price being Rs 101.56 as of November 1, which is equivalent to Tk 124.41 per litre, while our diesel will now cost Tk 80? Price differential of Tk 44.41 per litre (more than 50 percent) will remain, which is sufficiently a big margin for smuggling to continue. So, this argument does not hold water.
The second reason was straightforward: the rise in international prices. In the July-September period, the average price of oil shot up by 71 percent to USD 73 per barrel. Then in October, it hit USD 83.7. So, we must raise our prices—was the government's logic. The Bangladesh Petroleum Corporation (BPC) was losing Tk 20 crore a day. This bleeding had to stop, and raising the price by 23 percent would be the minimum that they could live with.
The energy ministry's logic is that domestic prices will have to reflect international prices, and since diesel and kerosene prices have gone up, so must the prices at the consumer end. We would have found this argument acceptable if domestic prices were actually adjusted with the fluctuating international oil prices, meaning our prices not only go up, but also reverses when the international prices dip. But it seldom does—and when it does, there is only a marginal adjustment.
Immediately after the Covid-19 pandemic struck the world and the global economy slumped, oil prices came down to USD 27 per barrel. From 2015 to 2021, the BPC made a profit of Tk 43,138 crore. Where did this "profit" come from? From the public, who were forced to pay a much higher price for diesel and kerosene than they should have had to, as the international prices were quite low. By what right did the energy ministry extract additional payment from ordinary citizens? It is, in our view, equivalent to a form of extortion by the government under a false pretence.
If we accept BPC's claim that it is losing Tk 20 crore a day, then the yearly loss roughly comes to Tk 7,300 crore—far less money than what PK Halder robbed from our banks. This could have easily been offset from BPC's accumulated profit from the last six years. Even today, in the midst of our pandemic recovery, the government will earn a near equivalent amount from VAT and duties on fuel, which it can use to pay the BPC, thereby obviating the need for energy price hike. But the energy ministry chose to "extract" the money from the consumers, who are mostly lower middle-class, if not downright poor, and risking gravely damaging our economic recovery.
Which brings us to the question of timing. Why now? Just when we are recovering from Covid, just when our exporters are beginning to put their feet on the ground, when our domestic manufacturers are steadily putting their houses in order, when our labourers are beginning to find jobs, entrepreneurs are starting to see light at the end of the tunnel, just when our farmers—who kept us well-fed during the height of the pandemic—are finding a way out of their depressed situation, to suddenly impose a price hike that will hurt us the most appears more like a sabotage of our recovery than a policy to ensure our growth.
Nobody benefits from this, except the BPC and its parent ministry. It appears that people's—if I may dare say, the government's—interest has been set aside to serve that of a corporation.
The price hike hit at the very root of the transport sector—which acts as the pivot in maintaining market stability—forcing the owners of these vehicles to raise fares. But they also took advantage of the situation to demand a hike in fares far higher than was necessary. Though the government said it was 28 percent, the market reality was 50 percent. For the transport owners, it was a golden opportunity to hold the public hostage and force the government's hand, under the threat of strike, to concede to their proposals. The bus and truck owners claimed that the last fare hike was in 2015, which for launch owners was in 2013. Hence, all their pending demands had to be fulfilled now.
Finally comes the issue of the method in which the government implemented the fuel price rise.
There is a practice of holding a hearing in which stakeholders' voices are given a play. Whether they are ever taken into consideration, we have very little evidence of. But the ritual is held and, if nothing else, the media covers it so that the people come to know, at least, what are the issues at stake.
This time around, even this ritual was not held, bypassing the Bangladesh Energy Regulatory Commission (BERC) which usually hosts these hearings. Why? So far we have had no answer. As a result, the declaration of the price hike took everybody—save those who were responsible for formulating it—by total surprise. The first people to react were the transport owners, whose vehicles stayed off the road and demanded new passenger tariffs to be fixed before they resumed their services. After three days' strike and the resultant public sufferings, the government increased bus fares by 28 percent and launch fares by 43 percent. The BPC's interest as well as the bus, truck and launch owners' interest were served.
Guess whose interest has not been served? You are right, the interest of the people—the daily commuters. They have no union, no lobby group, no rich benefactor. Our public representatives are supposed to represent them. But the reality is that most of them have their own respective economic axes to grind. Where is the time to think of the public? Our parliament has much better and more important things to do. People thought they had votes that they could cast every five years and bring their wishes to the fore. Since that does not count—literally and figuratively—anymore, they have no option but to accept whatever is made to come their way.
Let's do some common-sense reasoning. The bureaucrats of the energy ministry and that of the BPC knew full well what the impact of raising fuel prices would be on the economy, and how ordinary people would suffer. They also knew very well that transport owners of all types would make all sorts of exaggerated demands and, through a sudden strike, force the government to accept their demands. Knowing all this, shouldn't they have had some sort of a dialogue with the relevant stakeholders first? The fare hike could have easily been calculated based on the 23 percent hike of diesel and kerosene prices, agreed upon, signed and sealed and then made public, saying that from such and such date, fuel prices will be raised by the government and all those sectors affected by it will be allowed a rise of fares as detailed. This would have saved the public so much trouble and hardship.
Instead, a chaos followed in which commuters suffered immeasurably. The decision to raise fuel prices was taken on November 3. It came to the press on November 4. No high-level meeting was held till the following Sunday—due to Friday and Saturday being weekend holidays—after three days of harassment, physical suffering and precious loss of time for the poor and the ordinary. When meetings did take place, they only formalised the owners' demands, as if the fuel price rise was actually an excuse for the government to sanction price rises for the bus and launch owners.
It is our view that such things happen because of a fundamental disrespect for anybody who is not a part of either the officialdom or the ruling party of the day.
Mahfuz Anam is the editor and publisher of The Daily Star.