Lift duty on import of furnace oil

Textile millers have demanded duty-free import of heavy fuel oil or furnace oil to keep their factories up and running.

They said the tariff of gas was hiked by 222 percent in the last two years, which was eating up the profitability of the businesses in the primary textile sector as spinning, weaving, finishing and dyeing mills need uninterrupted gas supply.

“We have already started talks with the government to make HFO import duty-free so that the primary textile sector can run well,” said Tapan Chowdhury, president of the Bangladesh Textile Mills Association, yesterday.

The noted industrialist was talking to a group of reporters. He spoke about the current situation of the primary textile sector, which supplies 90 percent of the raw materials required by the knitwear sector and 40 percent by that on weaving.

Currently, importers pay 35 percent duty to import the oil, which, they say, was too high for the users.

“If there is any interruption in the supply of gas, fabrics can't be used and the millers have to face the losses,” Chowdhury said. “If HFO import is made duty-free, factory owners will be able to use it at cheaper rates,” he said. The former caretaker government adviser also said the government has not fixed the prices of liquefied natural gas (LNG) yet although it was saying that its import would start from next year.

“If LNG price is fixed at a higher rate, the industrial sector might not be able to afford it.”

The government plans to import 500 million cubic feet of gas a day in the start of next year and another 500 mmcfd from mid-2018 to ride out a shortage of gas at present.

On Wednesday, Prime Minister's Energy Affairs Adviser Tawfiq-e-Elahi Chowdhury said following the import, the supply of gas would increase 37 percent.

He urged the business community to take preparations accordingly.

“But I can assure you that LNG price will be affordable and remain stable in the medium-term,” he said.