ADB suggests fuel subsidy phase-out

The Asian Development Bank (ADB) has again suggested that Bangladesh readjust domestic fuel prices to reduce public borrowing, which contributes to inflation. “All forms of energy subsidy need to be phased out gradually to allow the domestic economy and individual consumers to adapt to higher energy prices,” the update said. Quoting the economic update, Head of ADB Economics Unit Rezaul Karim said the losses incurred by Bangladesh Petroleum Corporation (BPC) have totaled US$1.5 billion, or 2.4% of the country’s GDP. “If the BPC keeps incurring losses and continues borrowing from NCB’s (Nationalized Commercial Banks), the inflationary trend will get greater boost and prices of essentials will go up,” he warned. (August 1, 2006)