DHAKA (THE DAILY STAR/ASIA NEWS NETWORK) - We urge the government to take note of the warning issued by the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) in regard to increasing energy prices.
The FBCCI has rightly pointed out that raising the prices of electricity and gas right now would be suicidal, as it would significantly raise production costs for Bangladeshi businesses, making it impossible for export-oriented businesses in particular to compete with other countries. With the ongoing instability in the exchange rate, and with our forex reserves dwindling, any decrease in exports would be extremely detrimental at this stage-and could lead to further reduction in the forex reserves of Bangladesh. And, in the long run, this may cause huge damage to our business sector.
Along with increased production costs for businesses, inflation, which is already hitting record highs, will also increase substantially for consumers, lowering their disposable income even more. As low- and middle-income people are already struggling to afford their daily essentials, making sure that inflation does not rise any more should be the government's number one priority right now. The government needs to realise that the inflation that will result from a 58 per cent increase in bulk electricity price could lead to complete chaos due to the strain it would put on ordinary people.
Equally importantly, the government has another alternative to raising energy prices. As members of the business community have pointed out-which experts have also suggested-instead of raising the prices of electricity and gas, the government should bring radical changes to the energy and power sectors, starting with shunning the quick rental power plants, which are no longer essential to meeting our energy needs and have become a huge burden on the public exchequer.
In their place, it should make use of the more efficient ones to generate electricity at lower costs. This might not be a popular decision among powerful interests, but it is essential given the current circumstances. Moreover, the government should look to get rid of illegal connections and reduce unnecessary consumption to address the current energy crisis.
Trying to address the ongoing energy crisis by raising energy prices will lead to an even bigger one. The business community and experts have made that abundantly clear. Therefore, it is extremely important for the government to look at other alternatives-which are readily available-rather than raising electricity and gas prices, as it has the potential to further destabilise our economy and cause mass sufferings.
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