The business owners urged the government to not increase the gas and electricity prices for now, again on Wednesday.
Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Md Jashim Uddin said this in three different letters.
The letters were sent to the State Minister for the Ministry of Power, Energy, and Mineral Resources Nasrul Hamid, Prime Minister's Power, Energy and Mineral Resources Adviser Tawfiq-e-Elahi Chowdhury, and Prime Minister’s Chief Secretary Ahmad Kaikaus.
In the letter, the FBCCI President said that it would not be appropriate to consider the proposal to hike the gas and electricity tariffs without a full analysis of the economic impact on public life.
The letter also reads that the country's 78% gas supply comes from its domestic sources and the rest is imported.
Citing the current situation as an emergency, the apex organization of the traders requested not to increase the price with subsidy at the import stage as proposed by the regulatory commission.
“We also urge you to take effective measures for regular drilling of wells to increase gas supply from the domestic sources as well as necessary reforms to eliminate all kinds of waste and illegal connections,” he added.
Regarding electricity, the letter reads that the oil is currently taxed at 34%, VAT on coal at 5%, with demand charge on electricity sales, source tax on gas is 6%, and 5% source VAT.
“Citizens and stakeholders in the manufacturing sector are having to bear the number of wasteful subsidies as well as the VAT and tax they are already having to pay,” he added.
He suggested that to resolve this situation, tariffs and VAT on the subsidized energy sector will have to be withdrawn or lowered.
“The government can also reduce the costs by stopping excess production by keeping a reserve of 30% more than the average daily consumption of electricity,” he added.
The letter also recommended setting up state-of-the-art coal-fired power plants by using local coal reserves and also suggested shutting down unproductive and inefficient power plants.
Moreover, in the letter, the FBCCI also called for purchasing cheap electricity from the regional power market as proposed in the SAARC Framework Agreement on Energy Co-operation (Electricity)-2014 and the India-Bangladesh Memorandum of Understanding-2010.
The apex trade body also urged to take and implement the Bangladesh, Bhutan, India and Nepal (BBIN)-based projects in the hydropower sector.
He also said that the pandemic and the ongoing Ukraine crisis have led to massive price increases in all sectors, including global food products, industrial raw materials, manufacturing materials, exorbitant transportation costs, and abnormally high exchange rates, which have led to exorbitant business costs.
“With the rising production costs and declining global demand in the export sector, it has become almost impossible to survive in the global competition over inflation,” he added.
However, on the same day, Bangladesh Textile Mills Association (BTMA) President Mohammad Ali Khokon also sent a letter to Tawfiq-e-Elahi Chowdhury requesting not to increase the price of gas.
He said the technical committee has recommended fixing the maximum price per cubic metre of gas at Tk15-Tk15.5.
If the price is fixed at that rate, the government would not have to provide any subsidy and the industries will also be able to survive.
At present, the price per cubic metre of gas for captive power (used for industrial power generation) is Tk13.85.
He also said that due to the current global situation, the prices of all types of raw materials, including consumer goods, have more than doubled.
On the other hand, BGMEA President Faruque Hassan also sent a letter to the Ministry of Power, Energy and Mineral Resources in this regard.
Defying the enormous odds caused by the Covid-19 pandemic, the RMG industry of Bangladesh has gotten back on the track of recovering from the fallout though the sector is still facing various challenges, he wrote in the letter.
The RMG industry is already under tremendous pressure from the unusual raw material prices, abnormal shipping costs, and increased fuel prices.
Any power tariff hike at this moment will add to the woes of the RMG industry as it will lead to an increase in production cost, resulting in erosion of competitiveness.
Thus such a decision will hinder the recovery of the RMG industry from the coronavirus pandemic, reads the letter.
A rise in inflation globally leading to a fall in real incomes can have an adverse impact on the market demands for garments.
According to him, the hike in gas and electricity prices will not only affect the RMG industry, but also will have a serious impact on the public since it will push up the price of basic commodities and services.
As a result, various sectors, including export-oriented readymade garments, are in a precarious situation.
