Leaders of the country’s major trade bodies for manufacturing industries on Sunday urged the Bangladesh Energy Regulatory Commission (BERC) to abandon its proposed gas price hike.

Businesses described the proposal as ‘against the development and stability of the country’.

They expressed alarm over the suggestion to set gas tariffs based on LNG import rates for new connections and the potential increase in the load for existing ones.

Leaders of the Bangladesh Chamber of Industries (BCI), Dhaka Chamber of Commerce and Industry (DCCI), Metropolitan Chamber of Commerce and Industry (MCCI), Bangladesh Textile Mills Association (BTMA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA), Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB), Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the administrator of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) have jointly urged the Bangladesh Energy Regulatory Commission (BERC) to reject its proposed gas price hike in a letter sent on Sunday.

Top officials from Meghna Group, City Group, Uttara Motors and Lafarge Holcim Bangladesh PLC also endorsed the letter, voicing their concerns.

The letter mentioned that leaders of the manufacturing sectors met on March 06 at BCI and opined that price hike would cause serious damage to the industry, business and the country as a whole.

They in the meeting rather proposed to reduce the existing gas price and fix it as the blended rate of Tk 24.39 per cubic meter to help sustain the industry.

The proposed gas price hike has left the industry and business in an uncertain situation, they said in the letter adding they don’t understand the reasons of gas price hike at a time when continuation of production and fresh investment in setting new industries are required for employment generation and stability.

‘Rather it seems that the move has proposed so that no new industry is set up and productions in the existing ones come to a halt,’ they noted in the letter.

They also noted that uninterrupted gas supply was promised when the unilateral gas price hike was made in 2023 but industries are not getting the required pressure and production has been disrupted due to 30 per cent to 40 per cent less gas than the demand.

As businesses are incurring losses due to less production due to gas shortage, they believe the distribution companies should compensate them.

The leaders rather proposed gas supply must be increased by increasing efficiency of gas distribution companies and their proper waste management and alternative energy especially coal based power plants should be run at full capacity.

‘Moreover, it is possible to reduce gas prices and reduce government subsidies by withdrawing double VAT and source tax on LNG import and tax imposed by the government on supply and various charges imposed by Petrobangla/BERC,’ read the letter.

Production in factories located in Gazipur, Ashulia, Savar, Narayanganj, Munshiganj, Bhaluka and Narsingdi decreased up to 40 per cent while production decreased by 50 per cent in industries like ceramics and steel mainly due to absence of uninterrupted gas supply, it added.

The leaders also highlighted in the letter that industrial investment and credit growth in the private sector have declined recently due to the irregular supply of gas and the steep rise in gas prices.

They urged BERC not to increase gas prices, but instead to dismiss the price hike proposal in order to safeguard the private sector, which is responsible for creating 90 per cent of the country’s total employment.