Another round of price hike
It is not without reason that a leading chamber of commerce opposed the latest proposal by Bangladesh Energy Regulatory Commission (BERC) to raise gas price by as much as 140 percent. This paper has always highlighted the adverse affects of these hikes in prices as they are detrimental to consumers as it is the retail customers who ultimately bear the increase in cost of production. The latest proposal by BERC that is due to hold a public hearing on August 7 intends to up cost of gas at household level by 140 percent, 130 percent for captive power plants and 62 percent for industry. Industrial output for essentials such as fertilisers will go up, as will every product produced in a factory. We are looking at more than doubling of cost of generating electricity and city residents will have to find money somewhere as their electricity bills more than double.
What is the rationale for such increases? Yes, we understand that natural gas is a finite resource. But one should be realistic in such cost revisions. If industrial production becomes so expensive so as to affect demand for products and the average consumer is battered by cost increases of electricity, the monthly budget will require readjustment from somewhere. There is no doubt that such significant rise in cost of energy will precipitate inflation. Policymakers must tread carefully before making such a drastic measure effective as it has been less than a year that BERC raised energy prices across the board.
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