Bangladeshi business leaders said the soaring oil prices will have multifarious effects on the economy with the rise in government's overall import bill and subsidy on fuel oil on the internal market, local newspaper The Financial Express reported Saturday.

The business leaders were quoted as saying Friday economy has been facing challenges, mainly due to continued rise in fuel oil prices and a further rise could affect the economy badly.

Intensifying Middle East tensions pushed the price of oil to a record-high 76.70 U.S. dollars a barrel in the Asian market Thursday.

"Bangladesh is a net fuel importing country and the government is also supplying fuel oil at subsidised rates. So, a further rise in oil prices will severely affect the economy," said President of the Federation of Bangladesh Chambers of Commerce and Industry ( FBCCI) Mir Nasir Hossain.

He said the government will have to spend more for the import of fuel oil that will force the government to borrow more from the country's banking system.

Dhaka Chamber of Commerce and Industry (DCCI) President MA Momen expressed the grave concern over the fuel price hike in the international market.

If the government raises fuel price in line with international prices, the country's booming small and medium enterprises (SME) will suffer largely, he said adding that transport cost will be higher, leading to further increase in the prices of essentials.

The government should encourage people to use gas for their vehicles to reduce the dependence on fuel oil, he added.

Source: Xinhua