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Any power tariff hike will have a serious impact on the garment industry as it will scuttle its recovery from the coronavirus pandemic and erode competitiveness, said Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
“The cost of production will also go up once again,” he told The Daily Star in a phone interview.
He shared the concerns as the Bangladesh Power Development Board (BPDB) seeks to increase the bulk electricity tariffs by around 66 per cent. The state-run agency has submitted its proposal to the Bangladesh Energy Regulatory Commission recently.
State-run gas distribution and marketing companies are calling for an increase in the price of the gas used in industries.
Hassan said the hike in power tariff might push up inflation, which hit a 14-month high of 6.05 per cent in December, driven by both food and non-food inflation.
In Bangladesh, inflation is rising because of global factors such as unprecedented freight charges and supply chain disruptions as well as local factors such as the impacts of November’s hike of diesel and kerosene prices.
“The increase in the price of basic commodities and house rent will also hit the garment workers. They are already suffering from the higher inflation and an increase in house rent,” Hassan said.
“We don’t want even a one per cent rise in the cost of production at this critical moment as we are making a turnaround from the pandemic. We incurred huge losses over the last two years from the severe fallouts of Covid-19.”
The garment industry in Bangladesh is already under tremendous pressure from the abnormal shipping cost, unusual raw material prices and the lower price of garment items.
“Any power tariff hike will only add more burden,” said Hassan.
“Local apparel exporters will lose competitiveness in the international market if the electricity price goes up. This will be particularly painful at a time when we are getting more work orders from international retailers and brands and entering new markets.”
The BGMEA chief urged the government to improve the efficiency of the power sector and reduce system losses so that the proposed price hike is not needed.
(TDS)
