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Export-oriented apparel manufacturers have urged the government not to increase fuel prices at least for the next six months, taking the soaring global inflation into consideration, as it would only push up the transportation costs.
Their call came after government officials said they are planning to increase the fuel prices by Tk 10 to Tk 30 per litre to reduce losses of the Bangladesh Petroleum Corporation (BPC).
Top officials of the Energy and Mineral Resources Division told transport leaders on Monday that BPC has been losing Tk 100.18 crore on average every day in June because of volatile prices in the international market.
However, industry insiders said they are already suffering due to the recent fuel and gas price hikes, which have pushed up their production costs but buyers are yet to adjust to them.
They also claimed that buyers are placing fewer orders due to the Russia-Ukraine war and the rising global inflation, and some buyers even cut down their existing orders.
Some apparel manufacturers said their orders have dropped by at least 25-30 per cent, which has decreased their production ratio to 70 per cent compared to their capacity.
“Although we are facing a crisis, we have to increase workers’ wages due to high inflation in Bangladesh,” Anwar-Ul-Alam Chowdhury, president of Bangladesh Chamber of Industries (BCI), told The Business Post. On June 5, the government hiked the gas price by 22.8 per cent. For captive power plants, the hike in tariff was 15.5 per cent.
At the same time, the gas tariff for power plants has been increased by 12.8 per cent, for large-scale industries by 11.96 per cent, for medium-scale industries by 10.09 per cent, for tea estates by 11.5 per cent and for commercial users like hotels and restaurants by 15.83 per cent.
The prices of diesel and kerosene were increased by Tk 15 per litre to Tk 80 in November 2021.
BPC General Manager (Finance) Moni Lal Das told The Business Post that the corporation is losing Tk 60 per litre since February this year. “This hike is to adjust prices in line with the global rates and reduce the pressure on government subsidies.
“We’ll be able to import fuel for three months with the money we have right now. Since the global market continues to remain volatile, we have no option but to raise the prices,” he claimed.
However, Bangladesh Knitwear Manufacturers and Exporters Association Vice President Fazlee Shamim Ehsan said that the workers have been demonstrating demanding a pay hike as the daily essential prices continue to rise due to the global economic crisis.
“They may take to the streets again if their livelihood gets costlier and leave them vulnerable after the hiked fuel prices push up transportation and other expenses,” he added. “At the same time, our export cost will rise as well because the hiked fuel prices will increase the production and transportation costs.
“Under the circumstances, we urge the government not to hike the fuel prices in the next six months. Otherwise, exports will decline further,” Ehsan said.
BCI chief Anwar also said, “We will be bogged down if the fuel prices are increased again because the exporters are already facing such a terrible situation due to uncertainty of the global market.
“The overall industry and livelihood of workers have already been affected severely after the government hiked the prices of fuel and gas the last time.”
