Thursday, 30 June, 2022

It’s not a right time to hike power, gas prices: FBCCI

The price rise to affect the consumer market, industry and trade leaders say

Bangladesh top trade body FBCCI urged the government not to raise the power and gas prices now, saying that such an initiative would be suicidal.

Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) said it is not the right time to raise the key utility prices when the country is trying to make a turnaround from the coronavirus pandemic crisis.

“The industrial sector can’t bear the price of the government’s wrong policy. The decision for increasing electricity and gas price now will be a suicidal decision for the government,” FBCCI president Jasim Uddin told a press conference at its office in Dhaka on Saturday.

Bangladesh Power Development Board (BPDB) and Petrobangla placed a power and gas price hike proposals to Bangladesh Energy Regulatory Commission (BERC) citing the surge in production cost.

The trade body alleged that the decision had been taken from a bureaucratic point of view only to leave the government in a more difficult situation. It said such decisions should be taken politically. 

“At one point, there was a need for quick rental power, but now it’s not necessary now. The quick rental power plants should be shut down along with other inefficient power plants,” Jasim Uddin said.

“But the government is trying to increase power and gas prices without  concentrating on these issues,” he lamented.

Instead of raising the prices, the government should carry out a huge reform to the power and energy sector, cut illegal connections, and lower unexpected expenditure by lower unnecessary power generation, FBCCI chief suggested.

Jasim Uddin presented the keynote paper at the press conference, also addressed, among other by, Bangladesh Textile Mills Association (BTMA) president Mohammad Ali Khokon, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) vice-president Shidullah Azim.               Bangladesh Chamber of Industry (BCI) president Anwar-Ul-Alam said: “The country is now facing acute crisis of US dollars. The commodity prices are also rising because of Russia-Ukraine war. In these circumstances, the hike in gas and power prices will shoot up production cost which will eventually impact the consumers further.” 

"So, it is not the right time to hike prices of electricity and gas,” he also said.

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) leader Mohammad Hatem warned that the price hike might be disastrous at a time when the export sector is recovering from the pandemic fallout.

“It will push Bangladesh back in terms of competitiveness,” he said.

Mohammad Hatem claimed that the export sector is reviving and the price rise of power and gas will hamper the process.

FBCCI director and BCI president Anwar Ul Alam Chowdhury (Parvez) said that during this currency crisis, the capacity enhancement of local industry is much needed.

He said textile industry will be destroyed if electricity prices are increased, which will be a self-destructive decision for the country.

FBCCI director and BTMA president Mohammad Ali Khokon said that the proposal of price increase of gas and electricity is made to embarrass the government.

Amongst others, FBCCI senior vice president Mostofa Azad Chowdhury Babu, former first vice president Mohammad Ali, vice presidents Md. Amin Helaly, Salahudidn Alamgir, Md. Habib Ullah Dawn and other directors were also present. BSMA president Manwar Hossain, NASCIB president Mirza Nurul Ghani Shovon, REHAB president Alamgir Shamsul Alamin also spoke at the press conference.

The government last increased the bulk electricity price to Tk 5.17 per unit in February 2020.

Now, BPDB in its proposal sought to hike bulk power tariffs by around 66 percent to Tk 8.58 per unit (1-kilowatt hour) from Tk 5.17 per unit subject to unavailability of state subsidy. The BERC technical evaluation committee suggested the hike by 57.83 percent without any provision of government subsidy.

In its proposal, BPDB argued that it will have a deficit of around Tk 302.51 billion in 2022 if the bulk- electricity tariff is not hiked.

It says its electricity-purchase cost of around 88.99 billion units of electricity would soar to around Tk 741.89 billion and sale price would come to around Tk 439.37 billion.

Besides, it claimed that the imposition of import duties and tax on furnace oil since June 2020 increased tax-related costs for electricity generation by around 34 percent.