While textile and readymade garment owners are demanding a cut in the gas price amid low pressure and export orders, Titas Gas Transmission and Distribution Company has asked them to pay additional security money as per the existing price.
The state-owned natural gas distribution company has already sent letter to at least 20 textile and readymade garment factories, asking them to pay extra security money. The company is also going to send letter to other factories.
Bangladesh Textile Mills Association (BTMA) sent a letter to Titas Gas on July 19 on behalf of the factories and urged the authority concerned to withdraw the notice.
Despite repeated attempts over phone, Titas Gas Managing Director Harun Ur Rashid Mollah could not be reached for his comment in this regard.
However, company’s General Manager (Finance) Aparna Islam said, “He (Harun ur Rashid) is dealing with the whole matter. As per the rules, gas consuming commercial establishments will pay security money against the price of gas used.”
“After the hike in gas prices, the amount of security money increased but no one paid it. So, we are doing so as per rules,” she added.
BTMA President Mohammad Ali Khokon told The Business Post that when the government increased the gas price up to 179 per cent, the authority assured them that gas pressure would increase. Besides, they made commitment that the amount of security money would not increase.
“But gas pressure is yet to improve and that is why most of the factories are bound to stop production for a certain time every day. Our export orders also declined due to the ongoing global economic crisis, and most of the factories have 60-70 per cent orders than the capacity.”
“Amid the situation, the notice is illogical and unfair. That is why we have sent a letter to Titas to withdraw the notice and urged the government to reduce the gas price at previous level,” Khokon said.
The apex body also sent another letter to the prime minister’s principal secretary Mohammad Tofazzel Hossain Miah on July 13 demanding cut in the gas price.
The letter was signed by Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Faruque Hassan, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) executive president Mohammad Hatem and BTMA president Mohammad Ali Khokon.
In the letter, the apex body said that the global market for textile and apparel shrank by 30 per cent in past two years due to price hike of raw materials, energy and dollar caused by Russia-Ukraine war.
Due to the high prices of raw materials in the global market, the price hike of gas to Tk 30 a cubic metre from Tk 16 increased the cost of production for yarns and fabrics excessively.
“Due to an increase in production and processing costs, 40-50 per cent capacity of the country’s textile mills remained unutilised,” the letter reads.
On January 18 this year, the government has hiked retail gas prices again, after just six months, to Tk 30 per cubic metre (m3). It was a staggering increase of up to 178 per cent.
For the hike in gas price for retail consumers, large, medium and small industries will pay Tk 30 per cubic metre (m3) against the previous prices of Tk 11.98 for large, Tk 11.78 for medium, and Tk 10.78 for small, cottage and other industries respectively.
The Energy and Mineral Resources Division made the new amendment to the Bangladesh Energy Regulatory Commission (BERC) Act, which empowers the government to set all kinds of energy prices any time bypassing the regulator’s jurisdictions.
According to industry insiders, when the government hiked gas price, they said that the government will import LNG from the spot market to increase gas supply to the national grid. Besides, the regulatory commission also told the industry leaders that after the price hike, their security money amount will remain unchanged.
But on July 07 this year, Ideal Textile Mills received a demand note letter from Titas Gas which asked to pay security money from existing Tk 15,657,711 to Tk 50,049,039. The letter also mentioned to pay the whole amount in cash.
Another textile mill, Abed Textile, received the same notice from Titas Gas at the end of last month, asking them to pay nearly Tk 2 crore more as security money.
Abed Textile Director Abdullah Al Mamun said, “We fail to pay gas bills regularly due to financial crisis. How we will pay additional security money? Besides, gas pressure remains unchanged. The authority should withdraw the demand note notice, considering the ongoing bad business situation.”
