Garment manufacturers criticised the increase of gas and electricity prices, saying this would lead to higher production cost and reduced competitiveness of their products in the export market.
They said such price hike was another blow to Bangladesh’s biggest industry which had already suffered months-long political unrest and euro devaluation.
“The country’s investment picture is not good, industry had to suffer due to political unrest and spend a lot of money to meet factory compliance criteria. In such a situation the tariff hike of gas and power is not a rational decision,” said Nasir Hossain, former FBCCI president.
He told Dhaka Tribune that the decision would weaken the country’s business capacity and reduce competitiveness in the export market.
“To give a cushion to the industry, the prices energy prices should be cut instead.”
Abdus Salam Murshedy, president of Exporters Association President, said production cost would go up further as the prices of gas and power - two key energy sources of production - had been increased by 26.29% and 2.93% respectively.
He said the industry had already lost competitiveness in the global market and the latest move would only worsen the situation.
“The export earnings have seen a fall of 11.96% in July, the first month of the fiscal year. After the energy price hike, we may see further declines in the months to come.”
A statement from Dhaka Chamber of Commerce and Industry said the price hike of gas and electricity would have “manifold impacts including loss of competitiveness in the global market.”
It said the decision would increase the cost of doing business and affect the exports.
DCCI said the price of Liquefied Petroleum Gas (LPG) remained high despite fall in international market, which would add to sufferings of the poor and middle-income people increasing their living cost further.
The trade body opined that tariff rise might discourage the existing slow pace of FDI Inflow to Bangladesh in the days to come as the utility crisis has always been marked a serious concern by prospective foreign investors.
Textile and RMG industries and business growth would face restraints and challenges as they are largest users of electricity from expensive captive power plants, DCCI said.
EAB and DCCI urged the government to withdraw and rationalise the new tariff rates of gas and electricity, and to adjust oil prices with the global market.
