Textile and clothing industry owners on Monday strongly criticised the proposed 130 per cent hike in gas price for captive power generation plants saying that it would adversely affect their industries, which are already facing tough competition in the international market.
They said, Bangladesh’s textile and apparel products are already facing stiff competition in the global market after increase in cost of production as a result of electricity and gas price hike in several times. Another increase in gas price would render them further uncompetitive in the world market, they added.
“The textiles sector is heavily burdened with exorbitant electricity and gas bills coupled with lower productivity. This leads to higher cost of production making Bangladesh’s textile products uncompetitive as compared to its competitors,” Tapan Chowdhury, President of Bangladesh Textile Mills Association (BTMA) told The New Nation on Monday.
The sector is already struggling for the unabated import of cheap fabrics and yarns from China and India. If gas price is hiked again, it will pose a big threat to the survival of local textile industries, he said.
Tapan Chowdhury further said if the gas price is hiked, spinners will not be able to supply the raw materials to the knitters and garment producers at competitive prices. In such a situation, they would switch to imported yarns making local spinning mills vulnerable.
Terming the proposed gas price hike ‘illogical,’ the BTMA leader urged the government to retreat the proposal immediately for the betterment of textile sector.
Tapan Chowdhury also suggested the government to formulate a long-term energy pricing policy for the sustainable development of the sector as well as accelerating industrialisation. All of textile sub-sectors, including processing, weaving, spinning, yarn, knitting and garment units, used gas in their captive power generation plants.
“Gas price hike would increase their cost of power generation and augment cost of business which would ultimately make country’s textile export uncompetitive in respect of other regional countries, including India, Pakistan and Vietnam,” Mohammad Hatem, former Vice-President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) told The New Nation yesterday.
He said that the knitting sector is already passing through a bad time and hike in gas prices would increase their cost of production and reduce their profit margin drastically. “Gas price hike would not be viable for the sector and it would lead to closure many small and medium factories, rendering thousand of workers unemployed,” he feared.
Critisising the government’s initiative to hike gas price again, Hatem said, “The business community is against the move of fresh energy price hike. We cannot accept such a move which ultimately affect the industrial production as well as create an anti-industrial environment within the country.”
M Siddiqur Rahman, the President of Bangladesh Readymade Garments Manufacturers and Exporters Association (BGMEA), flayed the 130 per cent increase in gas tariff and said that it would adversely affect export-oriented clothing industries. “We have already conveyed our concern to the government. We urged the government not to go for a fresh gas price hike considering capacity of the industry,” he added.
The Bangladesh Energy Regulatory Commission (BERC) has proposed to hike the price of gas to Tk 19.26 per cubic metre for captive power plants from Tk 8.36 now. The government had already raised the price of gas for captive power plants in September 2015 from Tk 4.36 per cubic metre to the current rate.
Captive power generators account for 17 per cent of total gas consumption, according to data from Petrobangla, the national oil, gas and mineral exploration company.
