The Metropolitan Chamber of Commerce and Industry (MCCI) requested the government on Tuesday to review the latest gas price hike decision, taking into consideration its impact on national economy.
The Bangladesh Energy Regulatory Commission (BERC) hiked gas price last time in 2015. This time BERC has hiked gas price in two phases, of which the first phase has come into effect from March 1. The second phase is scheduled to be effective from June.
However, the High Court ordered suspension of the decision of second phase gas price hike for six months.
"The MCCI believes that the proposed gas price hike will raise transportation cost, production and other related costs, electricity generation and fertiliser production costs, and costs of agri-products and essential commodities, which will raise inflation," the chamber said a press release.
"The gas price hike is not tolerable for consumers. Besides, the hike, at this moment, may hinder the country`s economic growth and welfare."
The release also said the decision on gas price hike came at the time, when demand of different consumer goods, including apparel items, is low, after Britain`s decision to exit the European Union.
Besides, the cotton prices in Bangladesh have increased by 20-25 per cent during the last two months, but the prices of RMG items have not increased.
The chamber also said power plants, which supply electricity to the industrial units, consume 40 per cent of the country`s total gas use. The price hike of gas, used for electricity generation, will destabilise competitive position of RMG, leather, footwear and other sectors.
The MCCI said the untimely gas price hike will destabilise the competitive position of many sectors, including ready-made garment (RMG).
"The export target that the government has set centring Vision 2021 and the goal set for uplifting the country to high-middle income status may be affected by the gas price hike."
The chamber also requested the government to take steps for ensuring proper use of gas instead of misuse by dishonest means. It may help face the situation without raising gas price excessively.
The MCCI, Dhaka further said common people are under tremendous pressure because of price hike of various essential commodities. The gas price hike will raise transport cost for them. The chamber requested the government to keep price of CNG (compressed natural gas), used in public transports, out of purview of the latest gas price hike.
It also said in 2008 the government formed a gas development fund for raising capacity of local gas companies, although it did not happen. Rather financial deficit is rising, as international oil companies (IOCs) are supplying increased volume of gas. The government is raising gas prices at consumer level to meet the deficit.
"This chamber thinks that the country`s energy sector may face major crisis and the economy may face increased risk, if gas price hike continues instead of carrying out reforms in gas tariff policy," the MCCI, Dhaka said.