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Hike gas prices in phases: BGMEA

26 January 2023

Staff Reporter  :
Apparel exporters have urged the government to increase gas price in phases considering the existing volatile domestic and global economic situation.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) made the call in a letter to energy adviser to the Prime Minister Tawfiq-e-Elahi Chowdhury, and state minister for energy and mineral resources Nasrul Hamid.
BGMEA president Faruque Hassan sent the letter on Wednesday.
In the letter, BGMEA president, also urged the government to ensure uninterrupted and adequate electricity and gas supply to the apparel manufacturing units for keeping production unhurt.
The BGMEA also demanded for the full waiver of customs duty and value added tax (VAT) on import of energy materials for a year to address the global crisis.
"Moreover, the government should ensure efficient use of energy instead of hiking gas prices so that  natural resources are utilised properly," the letter read.
For instance, the government should reduce the system loss by snapping the illegal gas connections and checking metre reading for efficient use of gas in the country. Besides, it should also fix the gas price by adjusting the sources of gas so the users can purchase it at affordable prices.
In the letter, the BGMEA also said the prices of raw materials for garment items have already increased in the local markets because of the fresh gas price hike. It also pushes up production cost.
"The unusual price hike of gas would hurt competitiveness of local apparel industry in global arena", the letter said.
The price hike of gas will also affect the inflation level in the local markets as the bank loan interest rate will also rise. The workers will be facing the severe impacts of the price hike of the essentials and there is a possibility of a worker unrest to take place in the country, the BGMEA said.
The law and order situation may deteriorate following such price hike and suffering of the workers, the letter said.
On January 18, the government raised the retail price of gas by 14.5 per cent to 178.9 per cent for industries, power plants and commercial establishments, who together account for 78 per cent of gas use in Bangladesh, as it looks to lessen its unsustainable subsidy burden amid a narrow fiscal space.
From next month, the price of gas used for power generation will be Tk 14 for each cubic meter, up 178.9 per cent from the existing rate, as per the gazette notification from the ministry of power, energy and mineral resources.
That would be a 150 per cent hike for large industries, 154.7 per cent for medium industries and 178.3 per cent for small and cottage industries.
For captive power plants, it would be an increase of 87.5 per cent.
Commercial establishments like hotels and restaurants will have to pay at Tk 30.5 per unit, up 14.5 per cent from the existing rate.
The tariff for households, fertiliser production, CNG-run vehicles and tea gardens will remain unchanged.

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