Energy crisis, price hikes add fresh pressure to inflation: CPD

The recent energy crisis and price hikes have intensified inflationary pressures, further straining household finances, the Centre for Policy Dialogue (CPD) said today.

Rising fuel and transport costs continue to push up the prices of essential goods, the independent think-tank said at a media briefing at its office in Dhaka.

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Power prices up 16.7% on average

The CPD organised the briefing to share its reading of Bangladesh’s economy in the current fiscal year, 2025–26, ahead of the national budget for the next fiscal year.

CPD Executive Director Fahmida Khatun said the Bangladesh economy faces multidimensional challenges and warned that it remains vulnerable to both domestic structural weaknesses and external shocks.

Among the challenges is elevated inflation, which rose to 9.04 percent in April 2026, driven largely by higher fuel, transport and service costs.

Wage growth continued to lag behind inflation, eroding the purchasing power of households, particularly those with low and fixed incomes, the CPD said.

The think-tank noted that fuel prices recorded sharp increases between December 2025 and May 2026. Diesel prices rose by 15 percent, while petrol, octane and kerosene prices increased by around 20 percent.

The impact quickly spilled over into the transport sector, leading to higher bus fares and increasing the cost of moving goods across the country.

CPD also highlighted a steep rise in cooking fuel prices. The price of a 12-kg LPG cylinder increased from Tk 1,341 in March to Tk 1,885 in June, marking an increase of more than 40 percent in three months.

The CPD said the recent Middle East crisis exposed Bangladesh's dependence on imported fuel and underscored the country's vulnerability to global supply disruptions.

Beyond energy costs, CPD identified weaknesses in the supply chain of essential commodities as another key driver of inflation.

The organisation noted that multiple layers of intermediaries and excessive market concentration often lead to higher retail prices, making consumers more vulnerable during periods of economic uncertainty.