Businesses call for deferring gas price hike to Apr 

Grappled with an inconsistent gas supply since June last year, businessmen call on the government to allow industries some breathing room by deferring the gas price hike to April from the upcoming February and revising the tariffs in the meanwhile. 

Their desire list also includes a dynamic pricing for gas, a long-term energy plan allowing industries to tailor their measures beforehand to cushion the shock and focusing on minimising system loss. 

All the pleas centre on uninterrupted gas supply at a reasonable rate, according to industry leaders while talking to The Business Standard on Saturday.           

Jasim Uddin, president of the Federation of Chambers of Commerce and Industries (FBCCI), said, "We request the government to defer the date until April for the new gas tariff." 

Noting knock-down impacts on both export and local markets by a gas crunch, he told The Business Standard that businessmen would try to convince the government to revise the tariff. 

Following a 5% power price hike, the government on 18 January increased gas prices by a staggering 88% for captive power, 150% for large industries and 178% for small and cottage industries.

Explaining the price hike, the Energy Division said increased demand for gas has to be met by importing LNG at a higher price from the spot market amid the global energy volatility. 

Amid the gas crunch at home and repeated appeals by businesses for a smooth supply, the prime minister also told the House that entrepreneurs will have to pay the prices at which the government purchases the fuel from global markets if they wish to avail uninterrupted supply.

"Even the recent 179% tariff hike does not guarantee an interrupted gas supply to industries," said Md Saiful Islam, president of the Metropolitan Chamber of Commerce and Industry (MCCI).

Echoing the FBCCI president, the top MCCI leader also said that inconsistent gas to industries will hurt both the global and local production chain.

Fruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), also called for a revision of the recently hiked gas prices. "Just after the electricity hike, it is not logical to increase the gas prices." 

He further stated that instead of tariff adjustment to reduce energy subsidies, the government should prioritise minimising system losses in gas supply and disconnect illegal connections.

Introduce dynamic pricing for gas too

Sameer Sattar, president of Dhaka Chamber of Commerce and Industry (DCCI), has called for ensuring that gas tariff is adjusted at home as soon as the price of the fuel comes down in the global market – the mechanism of dynamic energy pricing.

In a major shift from administered pricing, State Minister for Power, Energy and Mineral Resources Nasrul Hamid recently said there will be a policy to sync the prices of gas, electricity and fuel oil every month in coordination with the international market.

The state minister said the new pricing will be effective once the amendment to the Energy Regulatory Commission Act is passed by the House. 

Under the dynamic mechanism followed by most developed nations, if the prices go up in the international market, they will automatically increase in the local market and vice versa.  

At a press conference on Saturday in the capital, Sameer Sattar said, "The issue of fuel price hike should not be one-way only. If the price of fuel decreases in the international market, without delay, initiatives should be taken to adjust the prices in the local market as well."

He said after increasing the gas prices, it now becomes the government's responsibility to ensure uninterrupted gas no matter how the authorities would do that.