A proposed hiked in gas price by Bangladesh Government has drawn serious criticism from the textile millers in the country. Once implemented, mill owners will have to pay BDT 16 for every cubic metre of gas from current BDT 9.62, marking a significant surge.
It is important to mention here that production of a kilogramme of yarn needs around BDT 8-9 worth of gas. The steep hike in price will make Bangladesh uncompetitive in the global market due to the (already) rising production costs. Post-implementation of new gas price, production cost for a kg of yarn will also increase to BDT 22.
“The textile manufacturers will face difficulty while dealing with their buyers as they will not ber ready for the retrospective price rise,” said Shahid Alam, Vice Chairman of Jalal Ahmed Spinning Mills Ltd.
Alam was speaking at a meeting, on the existing gas and energy situation in the country’s textile sector, organised by the Bangladesh Textile Mills Association (BTMA) at its Dhaka office.
Notably, Bangladesh is the third-largest apparel manufacturing destination, next to China and Vietnam, with over 6 per cent of global market share.
The apparel industry in the country, currently pegged at US $ 30 billion, is planning to be US $ 50 billion by 2021. However, the frequent surge in power tariff will make it tough for the industry to achieve its export target.
If implemented, it would be fourth such hike since September 2015 when per cubic metre of gas was available at BDT 4.18.
In another development, a new salary structure is also underway. Currently, Bangladesh’s minimum wage is the lowest in the world, standing at approximately US $ 65. Hike in wages and gas price will collectively hit industry players hard.
