A section of industrialists on Thursday urged the government not to hike gas and electricity prices.
The call came from a seminar titled ‘Energy Pricing: Impact on Industries,’ organized by the Dhaka Chamber of Commerce and Industries (DCCI) at its auditorium in the capital.Businessmen participating in the seminar pointed to various problems with the gas connection they get in their factories. They held the view that the faults should be corrected to provide a reliable gas supply, before the government goes for rate hikes.
Muhammad Fouzul Kabir Khan, former secretary to the Power Division, presented the keynote. He explained that the proposed hike in the price of gas would not have the same blanket effect across all industries. Rather it would vary from one industry to the other, depending on the predominance or otherwise of gas as an input in the production process.
So for a gas-fired power plant, the cost of power production may increase 93.7 percent; for steel mills, production costs may shoot up sharply, by 7.4 percent; and cost of cement production may increase by nearly 2 percent.
“Non-food inflation may also increase to 1.5percent due to gas price hike. Electricity tariffs in Bangladesh are quite comparable with other regional countries.” He put forth some recommendations to conclude, including hunting down and disconnecting illegal gas and electricity connections, encouraging the use of LPG, and introducing the concept of peak pricing for electricity tariffs.
Fouzul Khan’s assertion on electricity tariffs in Bangladesh being ‘comparable’ to other countries in the region was directly contradicted by State Minister for Power, Energy and Mineral Resources Nasrul Hamid.
“There is very low price in our country compared to other countries of the world. We have to come out from subsidy. For this, we need further five to six years,” the state minister said, before going on to dismiss the notion that the government hikes utility prices at all. He rather sees them as ‘adjustments’, either up or down according to subsidy announced in the budget. The government still subsidizes around Tk 6000 crore in the energy sector on an annual basis.Hamid also said that many industries with factories are being built in Bangladesh without considering how to supply them with energy. “So I ask all businesses to use electricity more and more in your factories, and instead of cars with internal combustion engines to buy electricity cars from abroad.
“Pay your gas and electricity bills regularly and stop illegal connections in your factories,” he also upon the factory owners.
He called upon the industrialists to invest in planned Economic Zones to get uninterrupted supply of gas and electricity. Moreover, a Gas Management Master Plan has been put together by the government. A plan to ensure tolerable electricity price for the consumers is in place.
Before finishing his address, Sanders informed the audience that by the year 2041, the total demand for electricity in Bangladesh will reach 72,000 megawatt; but generation capacity will reach to 79,500 megawatt. Gas demand in industries will reach about 10,000 mmcfd by year 2041.
Abdus Salam, a former senior vice-president of DCCI, said the government should explore new gas fields to meet the country’s demand.
Mohammad Ali Khokon, President of Bangladesh Textile Mills Association (BTMA) said: “Gas is a very important matter in our factories. We urge the government not to raise the gas price.”
DCCI President Osama Taseer said that in March 2019, Petrobangla and gas distribution companies proposed average 102 percent gas tariff hike, of which 132 pc gas price hike for industrial users, 96pc gas price hike for captive power and 208pc gas price hike for power.
He said that for smoother industrial production we have to ensure uninterrupted gas supply as well as good PSI (Pound per Square Inch). Due to proposed gas tariff hike, input costs of industry may increase and may have impact on energy intensive industries like Fertilizer, Textile, Denim, RMG, Cement, Steel and allied sectors.
Dr Ijaz Hossan, professor of chemical engineering department of BUET and Dr Badrul Imam, Supernumerary professor of Geology of Dhaka University and others were present in the seminar.