Impact of a sudden fuel price hike on urban motorbike usage: Evidence from Barishal, Bangladesh

Fuel price volatility has long been an important topic for understanding how consumers react to immediate price shocks. The sharp increase in petrol prices of approximately 52 percent in 2022 was a major economic concern for analyzing the consumption behavior of urban commuters in developing countries like Bangladesh. This study examines how motorbike users responded to the sudden fuel price increase in terms of short-run fuel consumption. Data were collected from 220 respondents through face-to-face surveys at petrol stations, parking areas, and major traffic junctions across Barishal city. Respondents were randomly selected motorbike owners who use their bikes for personal purposes only. Random effects regression results indicate a statistically significant decline in monthly fuel consumption by 2.5 liters, along with a substantial reduction in average monthly riding distance of 104.3 kilometers following the price shock. Additionally, the estimated arc price elasticity of fuel consumption is –0.213, with larger reductions observed among unemployed and middle-income riders. Demographic characteristics such as age, income, occupation, and riding experience are also included to examine their influence on fuel consumption. Overall, these findings inform energy policymakers on targeted fuel pricing or subsidy reforms affecting urban commuters.