"Sugar is Tk90 [per kg], condensed milk Tk80, gas cylinder Tk1,400. How can we still sell a cup of tea for Tk5?"
This was an angry outburst of Rana, who operates a wayside tea stall at Eskaton in the city. Prices of all inputs of tea have surged, but he finds it hard to pass on the hikes to his customers – mostly daily wage earners, such as rickshaw-pullers.
Rana's sister Jasmine, who owns the stall, seems to have sympathy for regular customers and has raised the price by only Tk2 for a cup.
"Where will they get the money to give Tk2 more for tea? If rickshaw-pullers ask for extra fare, people are ready to fight them."
The small businesswoman, who runs her six-member family from the income of this tea stall, says her monthly grocery bills crossed Tk7,000 this month from an average of Tk5,500 earlier.
"Gas cylinder price has gone up. Now I have heard that the piped in gas bill at home will be Tk2,400," she says, worrying about rising business costs and household expenditure.
Small businesses like hers did not benefit from stimulus packages or interest rate caps or tax breaks offered by the government to bail the private sector out of the pandemic hiccups.
Nor the households are protected from surging prices of commodities like sugar and edible oils. After a hike in fuel oil and cylinder gas prices, fresh proposals for hiking gas and water tariff are looming as an added worry as already heated kitchen and grocery markets make queues of "new poor" longer in front of trucks selling essentials at subsidised rates at street corners.
Salaried people even in the private sector are not shielded from price shocks.
A well-paid executive of a pharmaceutical company finds it hard to compare official statistics of per capita income growth with his own income rise. "The statistics may be true, but it does not apply to 90% of people. I just see new worries are coming in my life every other day," he moans, giving examples of how the grocery bills for his four-member family jumped by Tk5,000 in January and why he has to curb his liking for cauliflower or bottle-gourd to rein in his expenses.
Hiking water and gas prices will mean an immediate call from the landlord asking for a rise in house rent, he adds.
Report of the Trading Corporation of Bangladesh (TCB) revealed that prices of rice, flour, edible oil, lentils, pulses, onion, garlic, turmeric, flour, milk, sugar, salt, eggs and other essentials have increased significantly.
Premium rice sold at TK60-68 in Dhaka on Thursday, which was Tk58-62 the same day in the previous year.
Price of lentils increased 44.44%, onion 100%, sugar 14%.
Price of eggs, the cheapest source of animal protein for low-income people, rose 24% to TK35-37 for a hali or four pieces.
Income of wage earners are not increasing comparable to the higher prices of commodities, according to the BBS. Even the rate of inflation surpassed the hiked wages in some sectors.
The economy faced 6.05% of inflation in December, when the wage rate index increased by 6.11% only 0.06 percentage points higher than the CPI rate.
As the wage increase falls short of commodity price hikes, purchasing power or real income of millions of workers in different sectors, from fisheries to industries to construction, has fallen.
Rising costs of everyday life, however, do not affect regulators to worry about consumer price index as inflation surged to 6.05% in December. Bangladesh's per capita income increased to $2,591 in the last fiscal from previously estimated $2,554, the official statistical agency said in its final estimation.
Stating that the per capita income has increased by 11% as per the government's calculation, Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, told The Business Standard that the reality is the poor's income rose a little and even many of them suffered income losses.
To earn $2,591, a four-member family's income should be more than Tk73,000 per month. He questioned how many families can do that? The grim reality is the poor people's purchasing power has been squeezed owing to a serious income inequality, he noted.
Long queues in front of TCB trucks to buy commodities at lower prices lay bare how much trouble poor and middle-class people are in, Mustafizur said, adding that in order to keep their purchasing power intact, economic growth has to be made more distributive.
Moving away from the dependence on VAT, the government should focus on direct taxes, such as income tax, wealth tax and inheritance tax to increase revenue collection, the economist added.
"There is a big difference in prices between our import or production level and consumer level. Those responsible for market monopoly and manipulation should be brought to book," he continued.
Due to restriction on pipeline gas connections to households, city dwellers are now growingly dependent on gas cylinders, whose price has been raised by Tk62 this month to Tk1,178 for a 12kg cylinder.
State-owned gas companies proposed raising retail rates by up to around 100% to offset high import costs, which will take pipelined cooking gas to over Tk2,000 per month from Tk985 for a two-burner stove.
And, the state-owned water monopoly too has chosen this time to propose a 38% hike in water tariff, from Tk15.18 to Tk20.94 per unit (1,000 litre), which will raise monthly water bill to Tk1,070 from Tk770 for an average household in Dhaka city.
Dhaka Wasa supplies about 80% of water pumping from underground aquifers and the rest from treating river waters. What the state-owned agency needs is electricity or fuel oil to run its pumps and feed its supply network.
As soaring fuel prices has been a global concern for a couple of years now, countries – from India to Italy – took measures to lessen the burden on people, hard pressed by pandemic-induced income erosion, as energy prices are associated with costs of almost everything of daily needs of goods and services.
But in Bangladesh, the buck had been passed straight on consumers when the state-run fuel monopoly in November hiked the diesel and kerosene prices by Tk15 per litre to Tk80, citing soaring global crude oil price. The hike led to rise in fares in bus and trucks, subsequently adding to commodity prices.
The same day India had cut taxes on petrol and diesel which relieved Tk20 per litre at consumer level.
Bangladesh's authorities paid no heed to similar suggestions. Instead, the government is now looking to hike gas prices for industries and power plants to reduce subsidy burdens, which are set to go more than three times higher than the budgetary allocation.
Europe is struggling to cope with the exorbitant gas price, but countries are taking a raft of steps like cash aid, payment deferrals to offset pressures on people in the winter when gas demand goes up to keep homes warm.
The UK's energy regulator Office of Gas and Electricity Markets (Ofgem) last month set an energy price cap to restrict energy companies from charging gas price at their will to protect 22 million customers from price shocks.
Even Sri Lanka opted not to hike energy prices, ignoring demands from oil and gas companies.
Here, consumers of water and gas are exposed to direct price hikes by official agencies as well as private businesses as in the case of soybean and palm oils.
Earlier this month the commerce ministry approved the increases by edible oil importers and refiners – by Tk8 per litre for soybean and Tk15 for palm oil. The latest hikes followed a similar hike in October.
Commenting on the rising costs of public sector goods and services as well, Professor Mustafizur of CPD said the burden of additional expenditure caused by inefficiency, project time extension and cost escalation is being passed on to common people. As a result, consumers need to spend more.
Dr Sayema Haque Bidisha, professor of Economics at Dhaka University, said the overall money flow into low-income people's hands is now much less than in pre-Covid times. In this situation, inflation is a big pressure.
Consumers should be given some breathing space for at least the next six months by cutting taxes, duty and VAT on import-dependent products, she added.
Stating that the government is increasing prices of many products and services to minimise rising subsidy pressure, Dr Sayema recommended not withdrawing subsidies in any sector for the next one year.