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Bring gas prices to rational level

BGMEA also urges govt to ensure gas supply

FE REPORT | January 26, 2023 00:00:00

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) urged the government to review the enhanced gas prices and bring the rates to a rational level.

Terming the latest tariff hike 'unusual', the apparel sector apex trade-body also requested the government not to raise gas prices at a time in a large scale.

Rather, it suggested raising prices gradually by ensuring uninterrupted gas supply - to help the country's largest foreign currency earning sector to face the ongoing challenges.

The trade-body further demanded withdrawal of customs duty and VAT on imported energy for a year.

BGMEA President Faruque Hassan made the pleas on Tuesday in separate letters to adviser to prime minister for power, energy and mineral resources Dr Tawfiq-e-Elahi Chowdhury and state minister for power and energy Nasrul Hamid.

"Readymade garment (RMG) sector brings 83 per cent of the country's total export earnings, and about 40 million people are directly and indirectly dependent on the sector," the BGMEA president said.

The RMG sector handled the Covid pandemic impact with the government's support. But uninterrupted energy supply is a must to continue production and timely deliver export orders, he noted.

"Production in factories has been severely affected due to the ongoing gas and electricity supply shortage following the Russia-Ukraine war."

Amid such a situation, the government on January 12 announced an 'unusual' rise in gas prices. Some days back, it also raised the retail rates of electricity.

The hike in electricity rates has already raised the prices of raw materials in the local market, resulting in increased production cost, Mr Faruque Hassan said in the letter.

As a result, inflation has gone up, and it has also raised bank interest rates, which might go up further.

He apprehended that it would be difficult for the industry to retain its competitiveness and sustain in such a situation.

Besides, prices of essentials have increased significantly due to the global economic situation, affecting the lives of workers. As a result, there might be labour unrest and the law and order situation might deteriorate.

In such a situation, the BGMEA president urged the government to take measures to bring down the system loss to zero level as well as not to raise gas prices unusually.

He also requested the government to fix gas prices after coordinating the prices of local natural gas, gas brought under long-term agreements, and gas imported from spot market - in order to ensure uninterrupted gas supply for the industry.

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