Bangladesh Govt Hikes Fuel Prices By Up To 66%

DHAKA (AFP) — Impoverished Bangladesh appealed Tuesday for global action to tame soaring crude oil costs, a day after being forced to hike state-set fuel prices by up to 66 percent.

The government late Monday raised fuel prices by 34 to 66 percent, saying it could no longer afford to sell petrol, diesel, kerosene and gas at subsidised rates set when oil cost just 60 dollars a barrel, against over 140 dollars now.

"It's an international crisis," said M. Tamim, the deputy energy minister in the army-backed government, which took power in 2007 and is slated to restore multi-party rule by the end of the year.

"We think rich countries, oil-producing countries and the United Nations should deal with the issue urgently," he told AFP.

Even with the price hike, the government will have to spend 100 billion taka (1.45 billion dollars) on fuel subsidies, which will consume 40 percent of the South Asian nation's development budget.

"Imagine a situation where crude hits 200 dollars a barrel. All development in Bangladesh will stop," Tamim said, urging world players to halt the price spiral "for the sake of Third World countries."

The price rises are a major blow for the country, one of the world's poorest where nearly 40 percent of the 144 million population survive on less than a dollar a day.

Bangladesh is already reeling from surging food prices, with the price of rice -- a staple -- nearly doubling over the past year.

The government hiked diesel and kerosene prices by 37.5 percent to 55 taka (80 US cents) a litre (0.26 gallons) and petrol prices by 34 percent to 87 taka a litre.