Businesses on Thursday urged the government not to hike gas price saying it would increase the cost of production and erode export competitiveness.
At a seminar on ‘energy pricing: impact on industries’, they said that the proposed gas price escalation would affect all energy-intensive industries including fertiliser, power, readymade garment and steel.
Dhaka Chamber of Commerce and Industry arranged the seminar at its conference room against the backdrop of the government’s move to revise the gas price upward.
DCCI present Osama Taseer said that Petrobangla and gas distribution companies in March proposed average 102 per cent hike in gas tariff — 132 per cent rise for industrial users, 96 per cent hike for captive power and 208 per cent for power sector.
Input costs of industry may increase and may have impact on energy-intensive industries like fertiliser, textile, denim, RMG, cement, steel and allied sectors due to proposed gas tariff hike, he said.
‘We need to remain competitive against our global competitors maintaining low energy tariff and uninterrupted supply of gas,’ he said.
He also recommended impact analysis on LNG pricing, reducing dependency on imported LNG, 3-5-year gas price policy and reduction in energy system loss.
‘The government needs to develop competitive energy tariff diversifying our energy mix,’ he added.
Former Power Division secretary Muhammad Fouzul Kabir Khan, in his key note speech, said cost of power production might increase by 93.73 per cent, cost of steel mills by 7.37 per cent and cement production by 1.93 per cent due to the proposed gas price hike.
Non-food inflation may also increase by 1.5 per cent due to the proposed gas price hike, he said.
Bangladesh Textile Mills Association president Mohammad Ali Khokon requested the government not to increase gas price considering current state of the textile sector.
About 585 textile mills are producing captive power and the sector would be affected if gas price is increased, he said.
Badrul Imam, a supernumerary professor at geology department of the University of Dhaka, recommended that the government take sweeping action for exploration of gas.
Ijaz Hossain, professor at chemical engineering department of Bangladesh University of Engineering and Technology, said that an increase in gas price would raise the electricity generation price.
State minister for power, energy and mineral resources Nasrul Hamid called upon the industrialists to invest in planned economic zones to get uninterrupted supply of gas and electricity.
He said that the government would ensure tolerable electricity price for the consumers.
He also discouraged captive power generation as its efficiency is 40 per cent lower than power plant.
By 2041, gas demand in industries will reach about 10,000 mmcfd from the current 4,000 mmcfd.
He said the outstanding gas bill as of now was about Tk 12,000 crore.
Former Power Development Board chairman Abdul Muyeed Chowdhury and DCCI vice-president Imran Ahmed spoke, among others, at the seminar.
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