The Trading Corporation of Bangladesh (TCB) has submitted a proposal to the Ministry of Commerce to increase the prices of soybean oil, lentils, and sugar sold through its subsidized program aimed at low-income families. The proposed price adjustments would see soybean oil rise by Tk 20 per litre, lentils by Tk 10 per kg, and sugar by Tk 10 per kg.

Currently, the TCB offers these essential commodities to approximately 6 million low-income families holding smart cards, a reduction from the 10 million cardholders previously served. Under the proposal, the price of soybean oil would increase from the current subsidized rate to Tk 120 per litre, lentils to Tk 70 per kg, and sugar to Tk 80 per kg.

The TCB argues that these price adjustments are necessary to alleviate the financial burden on the government. The corporation estimates that the proposed price increases would result in annual savings of over Tk 8.40 billion in subsidies. The proposal has been submitted to the Ministry of Commerce for review and approval.

A senior official at the Ministry of Commerce confirmed that the ministry had received the TCB's proposal and is currently evaluating its potential impact reported The Financial Express. Earlier this month, the ministry had requested the TCB to conduct a comprehensive analysis of the potential effects on consumers if the price hikes were implemented.

Under the TCB’s subsidized sales program, each eligible household can purchase a maximum of one kilogram of sugar, two kilograms of lentils, and two liters of soybean oil through their smart cards.

The TCB’s proposal highlights that the prices of these essential items have risen significantly in the local market over the past year, while the subsidized prices offered through the TCB program have remained unchanged. The corporation believes that the proposed price adjustments will have a minimal impact on the beneficiaries, given the substantial difference between the subsidized prices and the prevailing market rates.

Furthermore, the TCB anticipates that the price increase may have positive spillover effects on the broader market. They suggest that the tendency for retailers to sell these items at inflated prices could decrease as more of the subsidized goods become available to the public. The corporation also hopes that the price adjustments will discourage hoarding and black-market activities by dealers, as the incentive to profit from reselling subsidized goods would be reduced.

The Ministry of Commerce official, however, reiterated that the proposal is under review and that the ministry is carefully considering the potential consequences of the proposed changes before making a final decision. The timing of the ministry’s decision and the potential implementation date for the new prices remain unclear.