REJAUL KARIM BYRON and WASIM BIN HABIB

People can brace themselves for yet another round of living expense hike as the government is mulling over raising the prices of electricity, gas and fertiliser by March to bring its subsidy burden down to a tolerable limit.

The prices of electricity and gas could see a rise as early as this month and by March would come the hike in the prices of fertiliser -- whose knock-on effect would be costlier fruits, vegetables and grains -- according to finance ministry officials working on the matter.

However, there is a tug of war going on between the optics-minded and number-crunching officials over the choice to hike the prices of gas and fertiliser at this moment.

A section of the officials believes that an increase in the prices of the key items a year before the national parliamentary election would harm the government.

But the other officials deem a price adjustment is necessary now to prevent the subsidies for electricity and gas from heading towards the unreasonable territory.

The bid to hike the electricity and gas tariffs and fertiliser prices comes two months into the kerosene and diesel price hikes that went on to raise the living expenses for the poor and the middle-class still reeling from the blow dealt by the pandemic.

If the new proposals are approved, it would increase the production costs and fuel inflation further.

In December last year, inflation hit 6.05 percent, the highest in 14 months and overshooting the government’s target of 5.30 percent for this fiscal year.

Food inflation was the highest in six months, while non-food inflation came close to the high of 7.05 percent seen in December 2015. It touched 7 percent in December last year.

“The increase in prices would be slight but, on the upside, the government’s subsidy burden will become bearable,” said a top finance ministry official asking not to be named to speak candidly on the issue.

Besides, hiking the prices will help ensure funds for urgent health emergencies like procuring additional Covid-19 vaccines and booster shots.

The government may require additional money to tackle adverse situations should any new variant of Covid-19 crop up.

“We are witnessing a surge in the number of Covid patients due to the Omicron variant. If any new wave hits the country this year too, the government will have to spend additional money for food distribution programmes.”