In a move perceived as detrimental to the nation's industrial sector, the government has announced a 152% increase in gas prices, equating to a 2.5-fold surge.
However, industrialists argue this decision may lead to a halt in production, describing it as "self-destructive" amid ongoing crises.
Experts in the sector criticize Petrobangla for failing to address system losses caused by gas leakages and illegal connections, instead opting for a steep price hike.
They stress that rectifying these issues would have been a more acceptable solution than burdening industries with exorbitant costs.
Amidst existing challenges such as a dollar shortage, high interest rates, and labor unrest, industry owners are facing unprecedented difficulties.
The proposed gas price hike is seen as exacerbating these problems, akin to adding fuel to the fire.
Many industrialists express frustration over the unreliable gas supply despite paying premium prices.
Some contemplate winding up their businesses, arguing that trading offers a less risky alternative to manufacturing in such an adverse economic environment.
Economic analysts caution that the price increase will severely impact production costs, escalating inflationary pressures.
They assert that the high costs in the energy sector could deter new entrepreneurs from entering the market, ultimately harming the industrial landscape.
Industrialists further warn that the proposed gas price hike will deter any new ventures, as the increased costs render the market uncompetitive. This move is expected to have negative repercussions on the sector, hindering industrial sustainability and growth.
If the price hike is implemented, gas-dependent factories may have to shut down, pushing many into unemployment.
Current gas prices for industrial users stand at Tk30 per cubic meter, and Tk30.75 for captive power usage.
Petrobangla's new proposal suggests raising this to Tk75.72 per cubic meter, a drastic increase likely to impact both existing and new industrial players differently.
The president of the Bangladesh Knitwear Manufacturers and Exporters Association, Mohammad Hatem, criticised the proposed policy, stating that no entrepreneur would consider establishing a factory under such conditions.
He highlighted the existing struggle to cope with the current gas rates, questioning the sector's viability if prices more than double.
Economist Dr Zahid Hussain emphasised that the proposed hike will undoubtedly increase production costs, further intensifying inflationary pressures.
He also noted the persistent issues within Petrobangla, such as leakages and unauthorised gas connections, which contribute to system losses that remain unaddressed.
Energy expert Professor M Tamim highlighted that the price hike would pose significant barriers for new gas-based industrial entrepreneurs, challenging their ability to remain competitive in the market.
Previously, on 18 January 2023, the government raised industrial gas prices threefold by executive order.
The price per unit for large industries increased from Tk11.98 to Tk30, and for small industries from Tk10.78 to Tk30.
For captive power, the price was raised from Tk16 to Tk30 per unit, with further adjustments in February 2024 to Tk30.75 per unit.
Defending the rationale behind the price hike, Power, Energy, and Mineral Resources Adviser Muhammad Fawzul Kabir Khan explained that selling gas at Tk30 when purchasing it at Tk75 is unsustainable, noting that the government is already providing a Tk20,000-crore subsidy, which it intends to curb.
