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Dhaka Monday,  Apr 22, 2019

Business giants urge govt not to raise gas prices

EB report

Leaders of three of the most powerful business associations of the country-BGMEA, BTMA and BKMEA on Wednesday urged the government not to raise gas prices saying that they would have no option but to fold-up business if gas price is hiked unreasonably.

“How could we sustain our industries if gas price is hiked 132 per cent as proposed by the gas distribution companies?” said Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), while reading out a joint statement of the three leading business bodies at a press conference.

He said the proposed gas price hike if implemented, will have a big impact on the overall garment and textile sector as it will increase the overall cost by 5 per cent.

He said gas is a primary fuel of many linkage facilities like boiler, washing and finishing machines.

“The gas price hike may cause a great disaster for the whole sector”, he said adding that the countries garment sector has been under tremendous pressure following the labour wage increase against the backdrop of a competitive apparel price in the global market, reports UNB.

“Gas price hike will push up our production cost after which the other competing countries like Vietnam and Myanmar will snatch the market opportunity,” said the BGMEA president.

He termed the gas price hike a contradiction to the government’s commitment to offering the job to at least one person from each family as the proposal will block the creation of new employment by disrupting industrialisation.

He said the Titas Gas was seeking the price hike to give 35 per cent dividend to its shareholders.

“But it would not be wise to raise gas tariff considering the interests of a particular segment only,” he added.

Bangladesh Textile Mills Association (BTMA) president Mohammad Ali Khokon said, “If gas price is raised, the production cost of per kg of a thread will go up by Tk 7.72 or 9 Cents in US currency while currently, the local producers have to incur a loss of Tk 30 per kg of a thread.”

“So, end of the day we have to count a loss of Tk 32.92 or US 39 cents in the production of each kg of a thread,” Khokon said.

He noted the export-oriented apparel sector is dependent on the local textile sector for their primary sources of fabrics.

“So, if the textile sector gets affected by the gas price hike, it will have multiple effects on the economy and a major shock will be felt by the banking sector as banks have big financing of Tk 1.60 lakh crore in the sector,” he said.

He said the government has increased the gas price on six occasions while power tariff was increased by 400 per cent.

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) acting president Mansur Ahmed also addressed the press conference.

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