Bangladesh trade bodies call for suspending plan to raise gas prices

As recent media reports indicated that the government plans to raise industrial gas prices by around 150 per cent to Tk 75 per cubic metre, they called for policy to set up a competitive and sustainable pricing mechanism by consulting with stakeholders.

The Bangladesh Garment Manufacturers and Exporters Association, the Bangladesh Knitwear Manufacturers and Exporters Association, the Bangladesh Textile Mills Association and the Bangladesh Terry Towel and Linen Manufacturers and Exporters’ Association wrote a letter to energy adviser Muhammad Fouzul Kabir Khan in this regard.

Over the past five years, factory production costs have increased by 50 per cent, while export incentives have reduced, disrupting industrial operations, the letter noted.

Challenges such as import-export disruptions, banking sector issues, labour dissatisfaction, and security concerns have further strained production and supply chains, it said.

“The current initiative to increase gas prices comes at a time when our factories are operating under insufficient gas pressure and uncertainty and are suffering from massive financial losses. In our industrially intensive areas, especially in factories located in Gazipur, Mymensingh, Narayanganj and Savar, production has decreased by 50-60 per cent due to gas shortage,” the trade bodies were quoted as saying by domestic media reports.

In January 2023, gas prices for the industrial sector were raised by 150 per cent with a promise of uninterrupted supply, but the industry did not see anything like that, the letter noted.

If the gas price increases by Tk 45 per cubic metre, it would raise annual costs for the garment sector by Tk 6,300 crore, equivalent to 1.5 per cent of export earnings, while the textile industry and captive power plants, consuming 10 per cent of the country’s total gas supply, would face an added cost of Tk 11,675 crore annually, or 2.7 per cent of export earnings, it added.

ALCHEMPro News Desk (DS)