Discriminatory gas price hike will discourage new investors

The industrial sector in Bangladesh is immersed in a deep crisis today. The gas and electricity crisis is becoming increasingly severe.

Due to the lack of gas in the industries and factories, production has decreased by around 40 percent. As a result, production costs are increasing.

In such a situation, Bangladesh Energy Regulatory Commission (BERC) on Sunday increased gas prices for new industries by 33 per cent. In contrast, additional gas prices will be imposed on existing industries for using more than the permitted load. Traders say that due to this discriminatory price, new investors will face unequal competition and will be discouraged from investing.

This process of determining gas prices will create discrimination in the industrial sector. What kind of policy is this if old factories in the same sector will get gas at a lower price and new ones will have to buy gas at a higher price?

It is to be noted that BIDA Executive Chairman Ashiq Chowdhury said that the large-scale investment conference held in Dhaka just a week ago resulted in investment commitments of Tk 3,100 crore. This is undoubtedly promising news. But the bad news is that the BERC has increased gas prices for new industries. This decision was taken at a time when the economy is slowing; high interest rates on bank loans and high inflation are compounded by the dollar crisis. Much of the enthusiasm that was generated among domestic and foreign businessmen at the investment conference will be dampened by the increase in gas prices.

Meanwhile, the public perception has been strengthened that the government is reducing subsidies on fuel products as a condition for obtaining an IMF loan. We need an IMF loan to resolve the economic crisis. But the adverse impact that reducing subsidies will have on public life cannot be ignored.

The government should pay more attention to the fact that crores of taka are being stolen in the name of system losses in this sector. The current technical loss rate in the gas sector is about 3 per cent. According to international standards, technical losses should be between 0.20 and 0.30 per cent. In that case, the government can reduce subsidies even by reducing technical losses.

We believe that the interim government will give importance to industrial protection for the sake of the country’s economic progress. Gas prices must be considered realistically. In addition, a favorable environment must be created for industries.