Power tariff hike will add to woes

The decision to increase the wholesale price of electricity by 19.92 per cent to Tk 6.20 per unit has raised concerns among businesses who say consumers may soon have to bear the added burden.

However, the government has assured that the retail price of electricity will not increase for general consumers or industries.

Entrepreneurs say they are already having a tough time dealing with multiple crises, including the Russia-Ukraine war, depreciation of the local currency against US dollar, and frequent power cuts in recent months.

As such, the decision will only aggravate the situation when imposed at the consumer level as it may decrease the peoples' purchasing capacity, which will have a ripple effect on their demand for various products.

Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association, said the higher wholesale price of electricity will ultimately pass onto the retail level.

The decision will aggravate the situation when imposed at consumer level as it may decrease people's purchasing capacity, which will have a ripple effect on demand

"So, we will request the BERC not to increase it at retail level, especially for general consumers and industries," he added.

Faruque then said there is a lot of system loss in electricity production as well as theft in meter reading.

"There are many illegal electricity lines in many places and if the government is strict on these issues, the country's revenue will increase further," he said, adding that this would help cover the subsidies on energy.

Tapan Sengupta, deputy managing director of the Bangladesh Steel Re-Rolling Mills, said if the people's buying capacity decreases day by day, then so too will the sale of various products.

"This may result in layoffs while factories may even shut down at some point," he added.

Nasrul Hamid, the state minister for power, energy and mineral resources, told reporters at the secretariat that the price of electricity and fuel is being adjusted all over the world due to a global rise in production costs.

"But as the prices are not going to increase at the consumer level right now, people have nothing to worry about," he said.

Besides, whether the price will increase or not also depends on field level data. So, the next decision in this regard will be taken after verifying all potential impacts, Hamid added.

Dr Ijaz Hossain, former professor of the Bangladesh University of Engineering and Technology, said the price increase is rational as the Power Development Board had asked to hike electricity prices by 60 per cent while the Bangladesh Energy Regulatory Commission set it at only about 20 per cent.

"But the government should reduce the electricity production cost in the long term. So, it should phase-out high-cost oil-based power plants as promised for the last 10 years," he added.

Hossain then demanded the authorities wait for at least one year to raise the price of electricity at the consumer level considering the high inflation at present.

"If consumers are affected, it will increase their sufferings two-fold as the price of all essentials go up almost every day," he said.

Shirajul Islam Mollah, president of the Bangladesh Ceramic Manufacturers and Exporters Association, said the industry has long been suffering due to the increased price of US dollars, diesel and low gas pressure.

"If the increased electricity price is imposed on the consumer level, it will add insult to injury," he added.

Shamim Ahmed, president of the Bangladesh Plastic Goods Manufacturers and Exporters Association, said it is difficult to run industries in the current situation.

"It takes more electricity than other sectors to make plastic products. So, the decision will not be sustainable for this sector," Ahmed said.

Helal Uddin, president of the Bangladesh Shop Owners Association, said the decision is unfortunate as it will only increase the sufferings of businesses.

Mahbubul Alam, president of the Chittagong Chamber of Commerce and Industry, said electricity and gas are the main driving forces of all kinds of industries.

"The higher electricity price will automatically affect all products and classes of people," he told The Daily Star.

Rizwan Rahman, president of the Dhaka Chamber of Commerce and Industry, said that before hiking the electricity price, the government should focus on addressing the poor transmission system, lack of smart grid, and reduce system loss.