Bangladesh’s apparel makers rely on captive power for production due to high oil prices in the country in comparison to lower costs worldwide.The exporters are now seeking to import furnace oil directly.
They saymany power plants are turning to furnace oil-based captive power generation due to irregularity in the central gas supply and the recent hike in prices of gas.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Vice President Mahmud Hasan Khan told Apparel Resources that the apparel manufacturers have even written to the Government seeking direct import of furnace oil.
Apparel Resources has even obtained a copy of the letterwritten by Bangladesh Textile Mills Association (BTMA), which stated that under the current arrangement apparel manufacturers are buying a litre of furnace oil at BDT 42. With this, they are generating electricity at BDT 11 per unit for production.
However, the prices in the international market are much lower, which, if imported directly by the manufacturers, has the capacity to produce per unit electricity at BDT 6.5, marking a huge saving.
In the letter, BTMA President Tapan Chowdhury wrote that the mills introduced gas-driven generators for uninterrupted supply of electricity for production. Though it was profitable at first, the Government in the last two years hiked gas prices by 222 percent, pushing up the production cost.
Alongside the price hike, there is also the crisis of abundant gas supply.
Under the current arrangement, apart from Bangladesh Petroleum Corporation (BPC), only the electricity producers are allowed to import furnace oil in Bangladesh. State Minister for Power and Mineral Resources, Nasrul Hamid said that private power producers can import fuel oil after securing permission of the Government.
