Kazi Zahidul Hasan :
Industry leaders on Thursday criticized the government for the latest hike in gas tariff saying such a move will transmit a shockwave to the industrial sector by raising manufacturing cost.
They also vented their ire at the frequent hike in gas, electricity and fuel prices.
The Bangladesh Energy Regulatory Commission announced the tariff hike of gas price for all kinds of users, including households and industrial units, by an average of 22.7 per cent.
Opposing the latest gas price hike, Abdus Salam Murshedy, President of the Exporters Association of Bangladesh (EAB) told The New Nation yesterday that the hike would raise production cost of the local export-oriented industries significantly making them ‘uncompetitive’ in the global arena.
“It will affect their profitability too,” he added.
“The fresh gas price hike is “unjustified and inconvenient” when the export sector is passing a bad time in the face of economic recession in western markets, Brexit, falling value of Euro and British pound and rising cost of doing business at home. So, the latest hike in gas prices will tag additional pain to the export sector,” he said.
Industries are using gas for captive power generation to back up uninterrupted production due to unreliable power supply by state-owned companies.
“Prices of fuel, electricity and gas are decreasing everywhere in the world whereas the government of Bangladesh is raising their prices frequently in the name of price adjustment. This is not fair policy when it is badly affecting manufacturing growth as well as livelihood of limited income group people,” said Abdus Salam Murshedy.
He also said, the hike in gas prices is unjustified when the apparel and clothing sector is bearing the burden of over 17 per cent additional production cost resulted from increase in wage, utility and transport cost.
Murshedy, a former President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), urged the government not to increase gas price at this moment in the greater interest of the industrial sector as well as the economy as a whole.
“All kinds of consumers will be hit hard from the hike. But the industrial sector will be the immediate victim as the hike will erode competitiveness of local manufacturing goods in global market,” Mahmodur Rahman Sumon, General Secretary of Bangladesh-Greece Chamber of Commerce and Industries (BGCCI) told The New Nation after the gas price hike announcement.
Terming the hike “unacceptable,” he said, “The hike will push up the cost of industrial production, transportation, raw material and industrial goods and thereby accelerate inflation putting a knock-on effect on the overall economy”.
Criticizing the government for gas price hike, The BGCCI leader said the government moved for a significant tariff hike of natural gas when gas supply by distribution companies is yet to ensure uninterrupted supply of gas or prevent gas theft.
“Many industrial units are sitting idle due to lack of gas connections. On the other hand, those connected with gas links are not getting required gas supply to run their production smoothly. In such a situation, tariff hike in gas is ‘illogical and unjustified,” said Mahmodur Rahman Sumon.
He also warned that the hike would have a damaging impact on industrialization and create a fresh roadblock on foreign direct investment due to unsustainable energy prices in the country.
The BGCCI leader demanded withdrawal of the gas price hike.
“It would add further woes to the apparel sector which have already fallen into the risk of losing share of export market due to its waning edge in the international market,” Mahmud Hasan Khan Babu, Vice-President of BGMEA told The New Nation.
“We are losing our edge in the international market because of rising cost of production. A further rise in cost of production as a result of gas price hike could drive away the global buyers to other sourcing countries from Bangladesh, posing a potential risk to the country’s largest export industry,” he said.
Highlighting the disconcerting export performance of the sector, he said, the production cost of the apparel manufacturing has already increased by 17 per cent, but the average export growth rate of the apparel sector in the July-December period of the ongoing fiscal year was only 4.37 per cent.
“Even, our apparel export to the US, the biggest market, declined by 9.11 per cent, the UK by 5.19 per cent and Canada by 7.03 per cent during the period posing a big challenge for achieving this year’s export target.
When the industry needs succour, the government apparently comes out with additional burden to the industry by raising gas prices. This is totally illogical and unacceptable. It will bring a disastrous impact on the industry,” said Mahmud Hasan Khan Babu.
