The government has increased gas prices for industries by nearly three times, an unprecedented hike condemned by consumer rights activists and businesses as “unjustified”.
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.
But still, the businesses, who had urged the government to resume the import of costly fuel to continue operation, said a threefold hike is “untimely”.
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. 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.
In a statement, 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 defended the decision to discontinue subsidies for the energy sector in parliament on Wednesday, saying industries must pay in full for gas if they want uninterrupted supply.
Professor Shamsul Alam, an advisor to the Consumers Association of Bangladesh, has accused the government of passing on to people the burden of an “unjustifiable” rise in the cost of supplying energy.
“We need to think whether to raise prices or cut costs,” he said, calling for protests against decisions that led to cost rises following “corruption” in the government agencies that deal with energy.
“No one paid heed for a long time after we had spoken about the inconsistencies in spending. They [government agencies] raised costs and showed losses. The government gave subsidies to cover the losses, and now it has decided to stop the subsidies.
“People will directly suffer for the price rises now.”
Prof Shamsul alleged the government is spending more money than is necessary for the entire process of supply – importing LNG, producing gas domestically, distributing fuel and running operations.
He suggested launching protests after analysing how “unjustified” the price rise is.
“Consumers have no alternative to launching a movement to stop plundering in the name of cost rise,” he said, calling on businesses to object to the decision to raise gas prices.
Shahidullah Azim, a vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said: “It is not the right time to raise prices when activities in the factories have fallen.”
“We agreed to accept a gas price rise to Tk 22 per unit, but it has been increased from Tk 16 to Tk 30 in an unprecedented manner.”
He thinks buyers will refuse Bangladeshi goods due to a rise in prices following the hike in the cost to buy fuel oil, gas and power.
Production cost increased by 33 percent over the past year and it may rise by another 14-15 percent due to the gas price hike, according to him.
Mohammad Ali Khokon, president of Bangladesh Textile Mills Association, said such a hike in gas prices was “unacceptable”. “It should’ve been a tolerable hike. The price could’ve been kept within Tk 20 per unit had the taxes been cut.”
Sirajul Islam Molla, president of Bangladesh Ceramic Manufacturers and Exporters Association, however, said they want uninterrupted supply to run the factories.
“We must accept the new rates because the government is unable to give subsidies amid a hike in fuel prices in the international market.”
“We asked the government to ensure uninterrupted supply even if it has to import LNG because we do not get gas regularly.”