As countries around the world emerge out of the economic slump induced by the COVID-19 pandemic, the uptick in commercial activity had an inflationary effect that was already overheating. Nothing stokes inflation like energy prices. With events in Europe this week having the landmark effect of driving oil back above $100 a barrel for the first time in seven years, the record surge in energy prices looks set to continue.

In an analysis of the winners and losers from oil's surge, Bloomberg Economics estimates Saudi Arabia can look forward to a windfall, gains for Russia, while smaller oil exporters like the United Arab Emirates fare better too. The biggest losers would be energy importers such as Korea, India and Japan. Bloomberg didn't mention it, but you can easily add Bangladesh to that list. The situation in Ukraine, which has the potential to shock the market, is yet another reason for Bangladesh to start exploring its territory - both land and water - for more gas resources. But that is in the medium-long term. In the short term, higher energy prices seem unavoidable.

Just this week, we learned that the government will award a contract to the Asian unit of trading house Vitol to supply a cargo of liquefied natural gas (LNG) for mid-March delivery at $29.70/mmbtu. Bangladesh had not bought on the spot market since a cargo from Gunvor for late October delivery at $36.95 per mmBtu. The prevailing view is that the country "is set to be a significant player in the global LNG market," with domestic gas production dwindling to serve a population upwards of 160 million. Asian spot LNG prices are hovering at $25/mmBtu but a colder weather outlook and uncertainty over European gas supply amid the geopolitical tensions means that traders are bullish about further potential rises.

Managing inflation at acceptable levels, and well below the rate of growth, has been at the heart of the current administration's economic mantra for success. In the post-pandemic recovery though, this poses a challenge. We also learned this week that record food stocks are not working to hold back runaway food prices.

The stock of food in government warehouses reached a new height of 2 million tonnes recently, brimming with rice and wheat. That means current stocks are double the level estimated to be secure for the country. Despite that, market analysts and Food Ministry officials are said to be at a loss to explain the soaring prices in the domestic food markets. According to the Trading Corporation of Bangladesh, prices of different varieties of rice are up between 4.5-8% from what they were a year ago. The government's recent move to devalue the currency against the dollar can also be expected to have an inflationary effect. For the moment, the overall rise in the price level can be said to be at tolerable levels. With professional management and sensitive policymaking, we may just be able to cushion its effects. Yet with events out of our control demonstrably exerting such influence in the matter, that probably is the optimistic view.