Bangladesh Fuel Hike Hits DSE, Lifting Diesel to Tk 135
Dhaka Stock Exchange fell 42 points as diesel reached Tk 135 per litre, squeezing margins for manufacturers and exporters.
Key points
- Dhaka Stock Exchange index fell 42 points to 5,550 following the fuel price announcement.
- Diesel prices rose to Tk 135 per litre, the highest level recorded since February.
- Container handling charges increased by 9.85 percent to offset higher transportation costs.
The Dhaka Stock Exchange benchmark index dropped 42 points to 5,550 on Monday. This decline followed a government decision to raise petroleum prices by Tk 20 per litre.
Diesel now costs Tk 135 per litre, marking the third price increase since February. Officials cite rising global fuel costs and freight expenses from Middle East conflict.
Market Reaction To Higher Costs
Investors reacted to fears of inflation and reduced corporate profitability. Md Sajedul Islam, a DSE director, warned that earnings growth would slow for many listed firms.
The Financial Express reported that sentiment in the equity market is turning cautious. This shift reflects the immediate impact of higher operating expenses on business.
Manufacturing Sectors Face Margin Pressure
Cement producers like Crown Cement face high fuel costs for production and transport. Royal Capital analysts warn that profit margins will shrink if retail prices remain fixed.
Automobile companies such as IFAD Autos face dual threats from costs and demand. Higher fuel prices discourage vehicle use, reducing sales for fuel-powered models.
Exporters Absorb Rising Domestic Expenses
Textile firms like Far East Knitting depend heavily on diesel for power. Asif Moyeen, the company’s managing director, noted that energy costs account for 20 percent of production.
The Bangladesh Inland Container Depots Association raised service charges by 9.85 percent. This adjustment directly offsets the increased burden of diesel prices on handlers.
