Bangladesh reviewing gas price for industries after nearly threefold rise

Consumer group CAB and business leaders condemned the decision to raise gas price for industries by up to 178 percent at a time

Published : 22 Jan 2023, 02:24 PM
Updated : 22 Jan 2023, 02:24 PM

Commerce Minister Tipu Munshi has said the government is reviewing the decision to raise gas prices for industries and power stations by a maximum 178 percent.

Such a hike after electricity price rise at the retail level will naturally impact the economy, he said at the inauguration of Rangpur Industries and Trade Fair in the northern city on Sunday, according to a statement from the ministry.

“Prices of products for which gas is needed will be affected to some extent. Discussions are ongoing to fix gas prices anew. Efforts are on to ensure gas and electricity at fair prices for the people.”

The government on Wednesday increased the prices of natural gas for industrial units and power producers for the second time in just over six months.

The gas price for industrial units of all sizes has been set at a flat rate of Tk 30 per cubic metre, the government said on Wednesday.

Previously, large industrial units had to pay Tk 11.98, medium units Tk 11.78 and small industries Tk 10.78.

The price of gas supply to power plants has been raised by about Tk 9 to Tk 14 a unit.

The Energy and Mineral Resources Division said the government decided to increase gas prices because it will need to buy LNG from the spot market at a high price.

Prime Minister Sheikh Hasina in parliament defended the decision to discontinue subsidies for the energy sector, saying industries must pay in full for gas if they want uninterrupted supply.

The unprecedented hike has been condemned by consumer rights activists as “unjustified”.

They fear the hike will increase inflationary pressure on people who are struggling to cope up with a cost-of-living crisis.

Some industries that heavily depend on gas and were on the verge of closure due to a supply crunch, however, are positive about the decision, considering the fact that they will get fuel to run the factories.

Still, the businesses that had urged the government to resume the import of costly fuel to continue operation said a threefold hike is “untimely”.