Rising oil prices will hit industry and agriculture hard: companies

A file photo shows workers picking up spools of yarn at a textile factory on the outskirts of Dhaka. — New Age Photo

Business leaders on Saturday expressed concern that the sharp rise in fuel oil prices will hit production, lives and livelihoods hard.

The government on Friday revised the prices of all fuel oils at consumer level.

Diesel and kerosene prices increased by 42.5% from Tk 80 to Tk 114 per litre, while gasoline price increased by 51.16% from Tk 86 to Tk 130 per liter .

The price of octane increased by 51.68%, from Tk 89 to Tk 135 per litre.

Decrying the unprecedented rise in fuel prices, companies said it would fuel inflation and industries would lose their competitiveness.

They demanded that the government reconsider the decision otherwise the industries would not be able to withstand the shock of such a sharp rise in fuel oil prices.

Business leaders also expressed concern over meeting the government’s export revenue target for the 2022-23 financial year, saying the fuel price hike would increase the cost of production by 10 at 20%, but that global buyers would not raise the commodity prices as high inflation has badly affected the economy of Western countries.

According to the companies, the sharp increase in fuel prices would hamper the growth of the agricultural sector and have a negative impact on food security.

“We are surprised to see that Bangladesh has increased fuel oil prices abnormally despite a downward trend in raw material prices in the international market,” the chairman of the Bangladesh Knitwear Manufacturers and Exporters Association said on Saturday. , AKM, Salim Osman, in a press release.

He said that the government’s decision to increase fuel oil prices abnormally would seriously affect all export sectors, including the knitwear sector, as the 43% increase in diesel prices would increase both the costs of public services and transport.

The BKMEA chairman has demanded cash incentives for the garment sector so entrepreneurs can recoup losses caused by rising fuel and gas prices.

The Bangladesh Garment Manufacturers and Exporters Association, in a separate press release, said Bangladesh may miss its export earnings target due to rising fuel oil prices.

The press statement signed by BGMEA First Vice President Syed Nazrul Islam said export orders were increasing in the country but production was hampered due to load shedding.

The cost of production is also rising as exporters run their units with diesel generators due to lack of electricity, he said.

Nazrul feared unrest in the ready-to-wear industry due to a possible delay in the payment of workers’ wages as the cost of production rose, but the prices of the products remained unchanged.

He urged the government to keep the garment sector out of the reach of rising fuel oil prices to keep export growth uninterrupted.

“Bangladesh has never experienced a 50% rise in fuel prices at once and it would be difficult for industries and people to bear the burden,” said Md Saiful Islam, Speaker of the Metropolitan Chamber of commerce and industry of Dhaka. New Age.

He said the Bangladesh Bank has taken initiatives to control inflation, but the huge hike in fuel prices will go against the central bank’s initiatives.

Saiful said rising fuel oil prices will increase utility costs and high utility costs will affect production, lives and livelihoods.

The MCCI chairman demanded that the government reverse the decision as soon as possible, otherwise the country would lose its export competitiveness, retail prices of raw materials would increase by 20-25% and inflation would exceed 8%. .

“If necessary, the government can increase fuel oil prices in phases. And if commodity prices go down in the international market, prices in the local market are also expected to go down,” Saiful said.

Dhaka Chamber of Commerce and Industry Chairman Rizwan Rahman says the government has raised fuel oil prices mainly due to the appreciation of the dollar, but the move will have a negative impact on the economy .

“We businessmen were not okay with the abnormal increase in heating oil prices because the sudden 100% cost increase was not in my sales forecast,” he said. he declares.

The president of the DCCI said that the increase in fuel oil prices would affect the agricultural sector and therefore food security.

Rizwan said the government should adjust fuel oil prices in stages so that the economy can bear the burden.

Regarding energy prices, he demanded the introduction of the open market system.

He also said that for a short-term solution, fast rental centers were essential, but it was not essential for 15 years.

“15 years ago, it was necessary to undertake new gas exploration to avoid the current crisis”, declared the president of DCCI.

He also called for incentives in the agricultural sector to ensure food security, as rising fertilizer and diesel prices would affect production.

Former DCCI chairman Abul Kasem Khan said rising fuel prices would increase inflation.

“We thought fuel oil prices would increase in phases, but an abnormal increase has occurred, which will negatively affect our economy.” he said.

Rising fuel oil prices would put pressure on industries and livelihoods, Kasem said.

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