Leaders of the Bangladesh Textile Mills Association on Saturday claimed that the sector faced production loss worth $1.75 billion in the last three months due to a supply shortage of gas.
Opposing the proposal by state-owned distribution companies for a 116-per cent hike in gas price, the BTMA said that any increase in gas price would erode the competitiveness of the sector as the overhead production cost of yarns would double from the existing 25 cents.
‘In 2019, the Bangladesh Energy Regulatory Commission increased the price of gas by 65.67 per cent for captive power generation with a promise that it would add 26 per cent of liquefied natural gas to the national grid and ensure uninterrupted supply to the industry,’ BTMA president Mohammad Ali Khokon said.
The BTMA organised the press conference on the shortage of gas supply to the factories at the Hotel Sonargaon in the capital, Dhaka.
He said that without fulfilling the pledge that had been made in mass hearing during the previous price hike of gas, the BERC must not initiate any move for further increase in price of gas.
The export-oriented textile mills have been facing acute shortage of gas for the last three months and the sector incurred production loss worth $1.75 billion in the period, Khokon said.
The BTMA president said that a good number of spinning, weaving, dyeing and printing mills located in Dhaka, Gazipur, Narayanganj, Savar, Ashulia, Manikganj, Narsingdi and Chattogram could not run with a full capacity due to the shortage of gas.
Under the circumstances, if the price of gas is increased by 103-116 per cent, the electricity cost would increase by Tk 20.47 to Tk 23 to produce a kilogram of yarns, he said.
Though the factory owners were not getting gas in their units, they were forced to pay crores of taka as bills to Titas Gas Transmission and Distribution Company due to lack of consumption metering through electronic volume corrector, Khokon said.
‘We have been demanding an electronic EVM gas meter for a long time but Titas Gas Transmission and Distribution Company is not willing to install the device in the industry as officials of the distribution company want to be benefited by taking advantage of system loss,’ the BTMA president said.
Citing a global study, Khokon said that 57 per cent of rental power plants remained idle in the country in the financial year 2019-20 and at the same time Titas Gas made a profit Tk 1,509 crore.
‘Why will people bear the cost of an idle power plant and why will Titas Gas take a move to increase the price of gas even after making profits?’ he questioned.
Though the BERC termed the proposal of distribution companies for up to 116 per cent hike in gas price illogical, the BTMA president thought that the comment of the energy regulator was nothing but an ‘eye wash’.
‘Recently, the prices of diesel and kerosene have witnessed a sudden increase by 23 per cent through a notification. We are in a fear that the same thing may happen in the case of gas price,’ Khokon said.
The BTMA demanded an immediate installation of EVM gas meters in the textile mills.
It also demanded frequent import of LNG and affordable prices through investing a portion of the profits made by Titas Gas in the last 3-4 years.
If the price of gas is increased, the proposed investment worth $2.5 billion may turn into bad investment, the BTMA president said.
He said that the gas price witnessed its latest increase in 2019 and after that, business activities remained very slow due to the pandemic.
‘After the latest hike in gas prices, businesses just started their business amid the coronavirus pandemic and I think time is yet to be matured to increase the price further,’ Khokon said.
Any further increase of gas price would disrupt supply chain of yarns and fabrics and the country would lose the potentials of global export market, he added.
BTMA vice-presidents Fazlul Hoque and Abdullah Al Mamun, and directors Md Mosharaf Hossain and Md Saleudh Zaman Khan, among others, attended the press conference.