No industrial gas tariff hike until next year

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Mushir Ahmed
The government will not increase industrial gas rate until early next year to help the country's thousands of garment manufacturers to ride out the global financial tsunami, officials said Sunday.
Chief adviser's special assistant on energy and power ministry M Tamim said the government took the decision despite the country's industrial gas tariff is the lowest in the world.
"Our manufacturers pay only US$1.5 dollars for every unit of gas they use in their factories. In India, the rate is $4.5 dollars," Tamim said.
"Still, we have decided not to increase the gas tariff until early next year. The global financial crisis and its possible impact on our garment industry have played a part to the decision," he said.
The decision came days after the country's leading garment-making groups, the BGMEA and the BKMEA, demanded a six-month moratorium on the government's move to hike gas tariffs by December this year.
Most of Bangladesh's 4500 garment manufacturers use gas to generate power as the government cannot ensure uninterrupted supply of electricity in the key industry.
The garment manufacturers said a hike in gas and power tariff would be suicidal for the factories at a time when they are facing squeeze in orders, cut in export prices and delayed shipments due to the worst global financial crisis since the 1930s.
Retail sales have plunged in the United States and the European Union --- which make up 90 percent of Bangladesh's $10.7 billion garment exports --- gnawing at demands for cars to clothing.
Economist and former finance adviser Wahiduddin Mahmud has said the crisis would have a knock-on effect on impoverished Bangladesh, slowing exports and dragging down economic growth.
The Dhaka University economics professor supported the garments manufacturers' demand for a moratorium on gas and power tariff, saying any hikes would be ill-conceived at this juncture.
Chairman of the Bangladesh Energy Regulatory Commission (BERC), which sets retail and bulk tariff of gas and power, echoed Tamim's comments, saying any move to hike the rates was unlikely this year.
"There is no chance for power tariff hike until February and March next year," Golam Rahman said.
"In case of gas tariff, it is unlikely that there will be increase before the end of the year. The BERC would review the situation and also the impact of the global financial crisis on our industry before it takes next course of action," he said.