The Bangladesh Chamber of Industries (BCI) has recently criticized the proposed basis for setting gas tariffs as "unconstitutional," arguing that it violates legal principles and fairness. The proposal suggests determining gas tariffs exclusively based on the import price of liquefied natural gas (LNG) for new connections and for any gas usage exceeding the sanctioned load for existing connections.
The BCI highlighted that the "unrealistic" and "one-sided" gas price increases implemented during the previous government are the primary cause of the current challenges faced by industries. In a letter addressed to the Bangladesh Energy Regulatory Commission (BERC) following a public hearing on the proposed price hikes, the BCI urged a reduction in gas prices by addressing system losses.
According to the chamber, energy costs previously accounted for 5 to 6 percent of production expenses but have now surged to 10-15 percent. For instance, the cost of producing one kilogram of yarn has risen to $2.45, whereas importing a kilogram of knit fabric from neighboring countries costs only $2.18. This disparity has led to a 39 percent increase in knitwear imports in 2024.
The BCI also noted that industrial production has declined by 30 to 40 percent across the board due to the "one-sided" gas price decision and the failure to ensure uninterrupted gas supply, particularly in key industrial zones such as Gazipur, Ashulia, Savar, Narayanganj, Munshiganj, Bhaluka, and Narsingdi, as reported by domestic media.
The chamber emphasized that Articles 27 and 31 of the constitution guarantee equality for all citizens, and implementing the proposed tariffs would result in unequal treatment of customers. Additionally, the BCI pointed out that the Gas Act 2010 and the BERC Act 2003 aim to foster a competitive market by encouraging private sector and individual participation. However, the current proposals are seen as non-competitive and contrary to these objectives.
"The proposed tariff, which would charge new customers nearly two and a half times more than existing ones, is inconsistent with the constitution, the law, and the principles of fairness," the BCI concluded in its letter.