BTMA warns against fresh gas price hike

Bangladesh Textile Mills Association (BTMA) on Wednesday warned that a recent proposal of government to increase gas tariff from Tk 28 to Tk 13.85 in per cubic meter may bring catastrophic outcome in the fabrics industry.

Earlier, the finance ministry has proposed to increase gas tariff from Tk 28 to 13.85 in per cubic meter for captive power, informed the Association in a press release.

Spinning, weaving and processing industries provide a large share of yarn and fabrics to the readymade garment sector which contribute greatly for export oriented earnings in the Textile and RMG sector, BTMA said.

Bangladesh Textile Sector is operated by the captive power generation where gas is the main raw material, BTMA stated, adding that, in the last few years, industries which used captive power generation got stuck with their production and were compelled to shut their operation as gas flow was too low. Beside, the prices of raw cotton also increased.

Amid such condition, Bangladesh Energy Regulatory Commission (BERC) has recommended fresh gas tariff hike in March which is illogical, BTMA argued.

Recently, BTMA got to know from a source that the Finance Ministry has proposed to increase per cubic meter gas tariff to Tk 28.

The textile mills won’t be able to cope with the increased price and fail to sell products in the market, if the proposed price of gas gets implemented, BTMA insisted. Currently, local textile mills spent almost 5.20-5.50 dollar to produce 30 carded yarn while he neighboring country has been exporting the yarn at 4.70-4.75 dollar, BTMA said.

The gas tariff hike will potentially increase the prices of the locally produced yarn by 20 per cent to 25 per cent which will increase illegal import of yarn, BTMA explained, adding that, consequently, more dollars will be spent and the foreign reserve will shrink further.