Energy price hikes might affect industries
Energy experts fear that Bangladesh’s energy prices might see a threefold hike over the next 10 years. They pointed out that the government opted for importing ‘expensive’ liquefied natural gas (LNG) from next year and this decision will trigger energy prices in the coming years.
Industry insiders and economist warn that energy price hike might affect Bangladesh’s fastest growing manufacturing sector and result from slow progress in other industries. Energy price hike might seriously affect the lifeline of Bangladesh’s economy- the garment industry.
The Financial Times in a recent report titled “Manufacturing flocks to new corners of Asia” said that Bangladesh and some other Asian countries can challenge the industrial giant- China. However, there is also concern about early manufacturing collapse and energy price and energy supply for the industries are crucial to transforming Bangladesh a manufacturing hub. Bangladesh Garments Manufacturers and Exporters Association has already expressed their concern about energy supply shortage for the industries.
Speaking at a seminar last week, energy experts said that they fear the energy prices will be costlier in the coming days. They also expressed their concern about the energy security of the country. Forum for Energy Reporters’ Bangladesh (FERB) organized the seminar in the city. Energy-expert Professor Dr. M Tamim presented the keynote paper at the seminar.
Prof Tamim said the energy subsidy to poor people must be continued. He said the fall in oil prices on the international market is benefiting the government as the average electricity-generation costs fell to Tk 5.55 per unit (1 kilowatt-hour) in the fiscal year 2015-16 from Tk 6.25 per unit in FY 2014-15.
Centre for Policy Dialogue (CPD) Research Director Dr. Khondaker Golam Moazzem alleged that the government was providing undue benefits to owners of rental-and quick-rental power plants by extending their tenure without lowering tariffs to an ‘expected’ level. He urged the government to go for installing more IPP and baseload power plants instead of short-term rental-and quick-rental ones to cut tariff rates.
Speaking on the occasion Mr. Nasrul Hamid said the government would ensure electricity for all citizens by 2018.
“But to supply electricity uninterrupted will take more time,” he added. He said the government has moved to waive value-added tax (VAT) on LNG imports to keep the price of the imported gas lower.
The government has already waived supplementary duty and import duty on LNG imports, he told the meet. Regarding government position on shifting policies on energy, he said, “We have to bring changes in our plans keeping pace with the global situation as the LNG and oil prices are declining in the world market.”
The cost of coal-fired power will increase due to modern and latest technology used in plants and environmental impacts, he added.