This is how people are choked with rising cost of living

Prices of commodities were already high, and the latest record hike in fuel oil prices has pushed those further up and low-income families are struggling to put food on the table.

Egg, the key protein source for low-income people, is the top item gaining prices the most since the 5 August hike in fuel prices. Higher bus fares also have come as a fresh blow affecting everyday commuters.   

Fixed income households are cutting back on meat, fish and eggs and are budgeting to spend less on health and education. 

Industry insiders foresee wage pressure looming as workers' scant income cannot cover the rising cost of living, which may even lead to a shortage of workers.

Fuel costs have gone up for middle-income families that use cars and motorcycles, including those used for ride-sharing.    

Market data shows that prices of all daily commodities have ticked up at least 40% over the past eight months in the wake of a 75% hike in fuel prices since November last and a severe shortage of dollars.

Apart from the kitchen staples such as rice, pulses, and oil, various household products including soap, toothpaste, cosmetics, and tissue paper also have become pricier. 

Transport fares have increased by up to 55% after the two spells of fuel price hikes. 

Landlords have raised house rentals this year even though they did not increase them in the last two years amid the Covid pandemic. 

In some cases, tuition fees and other charges at schools and colleges have increased while stationery such as notebooks and pens also have become costlier. 

Although low-wage earners and fixed-income people are the immediate victims of fresh rises in the cost of living, middle-income people are also feeling the pinch.

Dr Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM) said when prices of daily necessities increase disproportionately with income, people with low and limited incomes first reduce expenses on education and medical care.

They also stop taking nutritious foods such as meat, fish, fruits, and milk and turn to carbohydrate foods including rice and potatoes, he said, adding this increases the risk of creating an undernourished generation in the country in the long run. 

This will also reduce the economic activity in the country in the future, Selim Raihan maintained.

He suggested increasing subsidies on food besides strengthening market monitoring to prevent undue price hikes of goods.

How much have the prices gone up?

Before the recent fuel price hike, the government on 4 November 2021 increased the prices of diesel and kerosene by Tk15 per litre. 

A comparative analysis of the market price lists of essentials, released by the Trading Corporation of Bangladesh (TCB) on 4 November last and on 14 August this year, reveals that prices of coarse rice rose by 14%, lentils by 23%, bulk soybean oil by 19%, eggs by 45%, broiler chicken by 18%, atta by 38%, sugar by 13%, dry chilli by 75%, potato by 20%, turmeric by 13%, and local variety ginger by 17%.

The TCB data also shows that in the last two weeks, after the fuel price hike on 5 August, prices of eggs rose by 31%, broiler chicken by 29%, onion by 25%, atta by 10%, sugar by 10%, dry chilli by 9%, and coarse rice by 4%.

The actual prices of these products in the market, however, are more than what the TCB data shows, according to the traders of almost all the markets of Dhaka.

Due to the increase in prices of daily necessities including vegetables triggered by the fuel price hike, several products, including beef, have gone beyond the reach of lower-income people. 

Beef was sold for Tk500-550 a kg even a year ago. Yesterday, one kg of beef was selling for Tk730 at Shwapno super shop.

Along with the prices of fish, meat, and vegetables, the prices of all essential products have gone up.

Hasan Ali, owner of Sumaiya Store in the capital's Moghbazar, said, "A few months ago, the price of laundry soap was Tk18, which is Tk28 now. The price of medium-size perfumed soap has increased by Tk5-10. Half a kg of soap powder was available for Tk45. Now it costs Tk52."

"The price of a medium-sized toothpaste pack has increased by Tk8-10 to Tk50-52. The price of Tk2 minipack rose to Tk5 and Tk5 minipack rose to Tk8. The prices of small packs of chanachur, biscuits, bread, chips and other processed food items have increased by up to Tk5-10," he said.

Alamgir Hossain of Udayan Library in Bailey Road said, "The price of an exercise book has increased from Tk20 to Tk25, and that of a pencil by Tk2-5. The price of a general geometry box has increased by Tk10, and a calculator by up to Tk20-30. On the other hand, companies have reduced the amount of ink in the Tk5 ball pens."

Private firm employee Hedayetul Islam is skipping his mid-day meal while at work to save roughly Tk100 for family needs.     

Life is even harder for low-income people like Mohammad Abul, a rickshaw-puller, whose numbers are growing in front of Open Market Sales points. 

Costlier diesel has put the burden of additional transport fare for low and fixed-income people.

Bangladesh Jatri Kalyan Samity conducted a survey on 350 daily commuters including low and fixed-income office and factory employees with monthly income between Tk10,000 and Tk32,000. It found daily transport fare shot up by a range of Tk70 and Tk200 every day.

One of the commuters said he would have to send his family to the village home as he could not cope with the increase of bus fare by Tk2,100 a month.

Another one said his monthly additional transport fare has gone up by Tk6,000 from this month. Those who travel homes in surrounding districts once a week have to count on average Tk1,200 for every round trip to and from Dhaka. "How will they bear the additional cost on travel?" asked Mozammel Hoque Chowdhury, secretary general of Jatri Kalyan Samity, pointing out that city buses charge Tk3 to Tk7 per kilometre though the rate was fixed at Tk2.5.

For a mid-level office employee, the fuel for his motorbike now costs Tk250 extra per week. While a senior executive is now spending Tk1,300 more for car fuel every week. 

Cost of living of workers may create a wage pressure which will not be affordable for the apparel sector facing recession fears in export markets. "This may lead to workers leaving our factories and switching to villages," knitwear exporter Fazlee Shamim Ehsan said at a discussion last week, fearing a shortage of workers' shortage in the near future.

Dr Selim Raihan said, "Commodity prices in our country increase for no good reason. Prices rise under any pretext and it has to be controlled. 

"A permanent solution to stabilise commodity prices can be achieved if an orderly market system is introduced along with creating modern storage facilities for agricultural products."

Mentioning that Bangladesh is now becoming a middle-income country from a low-income one and per capita income is increasing, he said, adding, "On paper, the per capita income of a five-member family in the country is more than Tk90,000 but the reality on the ground is different."

"If the growth in per capita income was correct, there would not have been such an uproar in the country due to the increase in commodity prices. So, statistics must be accurate, and social security measures should be taken on that basis," he added.