Study Team: Mustafa K. Mujeri and Tahreen Tahrima Chowdhury

Sponsoring agency: 

International Insitute of Sustainable Development (IISD)

The study examines the nature and magnitude of the effect on transportation cost of major agricultural (food) commodities resulting from increases in the administered price of diesel. The evidence from secondary data show that overall inflation in the country tends to rise due to other demand and supply side factors that put upward pressure on the price level despite the fact that diesel price may remain unchanged; but when the diesel price is adjusted upwards, inflation rates seem to exhibit a faster rise.