Business leaders in the garment and textile sectors have expressed concern over the potential increase in gas prices in the industrial sector. They stated that if the gas price is raised again, the captive power plants in the garment and textile industries will incur an additional annual cost of nearly 18 thousand crore taka. This will have a long-term negative impact on the country’s economy.
Recently, the business leaders expressed these concerns in a letter to Muhammad Fawzul Kabir Khan, the advisor to the Ministry of Power, Energy, and Mineral Resources. The letter was signed by Mohammad Anwar Hossain, Administrator of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Shoukat Aziz, President of the Bangladesh Textile Mills Association (BTMA), and Hossain Mehmood, Chairman of the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA).
In a letter to the energy advisor, business leaders stated that recent media reports have revealed that the government is considering increasing the price of gas by nearly 150%, raising it to 75 taka per cubic meter. If this price hike is implemented, it could have a long-term negative impact on the country’s industrialization and economy.
The letter further states that even before recovering from the impact of the COVID-19 pandemic, the country’s textile and garment sector is facing additional challenges due to the Russia-Ukraine war, conflicts in the Middle East, and global inflation. Over the past five years, the price of gas has increased by 286.5%, electricity by 33.5%, and diesel by 68%. As a result, the average production cost in factories has increased by nearly 50% over the last five years.
Business leaders pointed out that currently, due to the gas shortage in industrial zones, production has decreased by 50-60%. This has led to significant financial losses for businesses. Additionally, reduced production has disrupted supply chains, making it difficult to maintain timely raw material deliveries and export lead times. As a result, businesses are losing the trust of their customers.
Referring to the 150% gas price hike in the industrial sector in January 2023, business leaders mentioned that at that time, there was a guarantee of uninterrupted gas supply to the industry. However, in reality, the promised benefits were not realized.
Garment and textile sector business owners stated that the latest gas price hike proposal comes at a time when an increase of 45 taka per cubic meter in gas price would raise the annual costs in the garment sector by approximately 6,300 crore taka, and in the textile sector by 11,675 crore taka. Overall, an increase of nearly 18 thousand crore taka in costs would be too burdensome for these industries to bear. As a result, there are concerns about losing competitiveness in the international market.
Source: Prothom Alo
