Business leaders in Bangladesh strongly advised against hiking the prices of electricity and gas as it would further increase the cost of doing business and make it impossible to maintain competitiveness and turn around from the pandemic related losses.
Calling it a “suicidal decision” for business if the proposals are accepted, Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), held a press conference on Sunday.
He also said that the hike in the price of power and energy would create multidimensional inflation which would have a negative impact on the lives of the people and would seriously wound the ongoing flow of development.
This is in response to the Bangladesh Energy Regulatory Commission (BERC) recommending hiking the bulk electricity prices by 57.83% last week.
The recommendation was made during a day-long public hearing on the Bangladesh Power Development Board’s (BPDB) proposal to increase bulk electricity tariffs by 66%.
The business leaders called such a proposal a “conspiracy against the government” to force it into an uncomfortable situation.
The FBCCI president also suggested rationing electricity or hour-long load shedding in unproductive industrial sectors to avoid bumping up power prices further.
“There are many power plants which have low productivity and their production may be stopped,” he said.
He also added that there are many countries in the world that are leaning towards rationing systems to reduce loss and pressure on power and Bangladesh could adopt such a system as well by accepting load shedding for 1-2 hours in the unproductive sectors.
There are various systemic problems in the power sector, one being overcapacity.
At present, the country's power generation capacity is 22,000 MW, but the demand is 14,000 MW.
He also said that the low efficiency of oil-based power plants, the delay in commissioning of coal-based power plants, and the current issues of the LNG market.
At the same time, many European countries are now being compelled to purchase LNG from Qatar at high prices after Russia banned its gas exports.
According to him, these systemic problems need to be properly identified and their solutions should be effectively planned without increasing the price of electricity.
He also said that the country needs to move forward to make coal-fired power plants operational in order to reduce production costs.
“Although environmentalists oppose it, industrialization cannot be stopped simply based on that. India, America, and others are building coal-fired power plants. China and India said they need to run on coal power till 2050. We need it too but to reduce its negative impact, we should move towards the latest technology,” said the FBCCI president.
He also suggested bringing radical changes in the overall management of the energy and power sector by disconnecting illegal connections, shutting down inefficient power plants, reducing overhead costs, stopping all kinds of irregularities and putting a stop to capacity charges to stop paying lazy producers.
The FBCCI president said that steps can be taken to increase prices only if the ongoing crisis caused by the Russia-Ukraine War persists.
Mohammad Ali Khokon, president of Bangladesh Textile Mills Association (BTMA), presented various data on gas issues and asked why Titas and Petrobangla want to yank up prices despite being in profit for the last three years?
Shahidullah Azim, vice-president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said it would not be wise for the authorities to rush to a decision regarding the price hike, they have to take time and discuss it with related parties.
“Moreover, the exports will decline if the proposals are accepted and the pressure on the foreign exchange reserve will increase,” he added.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that the decision to raise gas and electricity prices is suicidal at a time when the economy is regaining momentum.
“Gas and electricity prices are much lower in rival countries such as Vietnam, China, Cambodia etc and if we increase the price here, our competitiveness will decrease,” he added.
National Association of Small and Cottage Industries of Bangladesh (NASCIB) President Mirza Nurul Ghani Shovon said there is a conspiracy behind such proposals.
“A political, not bureaucratic decision, must be taken in this regard,” he added.
BCI President Anwar Ul Alam Chowdhury Parvez, BSMA President Mawar Hossain, REHAB President Shamsul Alamin and other top business leaders of the country were also present at the event.
