'Discriminatory' gas price hike will disrupt foreign investment flow, Bida tells BERC

The newly introduced "discriminatory" gas price hike will disrupt the flow of foreign investment as it will create a negative perception among investors who showed interest in Bangladesh after attending the recently held investment summit, said the Bangladesh Investment Development Authority (Bida).

In a letter sent on 15 April, it urged the Bangladesh Energy Regulatory Commission (BERC) to revise the gas pricing and adopt an investor-friendly tariff structure, warning that failure to do so would discourage new investments and hinder the development of a competitive market environment in the country.

In the letter, Bida Executive Chairman Chowdhury Ashik Mahmud Bin Harun requested the active cooperation of BERC Chairman Jalal Ahmed to take prompt action on the matter.

Speaking to The Business Standard, the BERC Chairman said, "I have been informed that the Bida Chairman has sent a letter regarding the revision of the gas price hike, although I have not yet received it officially."

He added, "As per the existing legal framework, there is no direct scope to revise the newly set gas prices. However, given Bida's concerns, we will bring the issue to the commission's meeting for discussion. We will also seek feedback from stakeholders and consider their opinions before deciding on the next steps."

On 13 April, the BERC announced a 33% increase in gas prices for new consumers and existing users expanding beyond 50% of their sanctioned load. The new tariff raises the rate from Tk30 to Tk40 per cubic metre for both industrial use and captive power generation.

The announcement faces oppositions from the country's business leaders who say the move could derail the government's broader economic goals at a time when Bangladesh is striving to attract foreign investment and revive industrial growth.

Referring to the recently held Bangladesh Investment Summit 2025, the Bida Chairman highlighted in the letter that over 450 investors and business leaders from 40 countries attended the event organised by Bida. Many expressed strong interest in Bangladesh's investment potential, with several signing MoUs and agreements pledging significant investments.

"A sudden announcement of discriminatory gas price hikes right after such a successful summit is likely to create a negative perception among prospective investors," the letter reads.

The letter said while Bida does not oppose the government's broader plan to reduce subsidies, the chairman recommended a more inclusive and non-discriminatory approach to subsidy rationalisation.

Following the gas price hike, the Foreign Investors' Chamber of Commerce and Industry (FICCI) and the European Union Chamber of Commerce in Bangladesh (EuroCham) also expressed concerns over the BERC's gas tariff structure, which differentiates between new, committed, and existing customers within the same industrial category.

In a statement issued on Tuesday (15 April), the FICCI said the newly announced tariff mechanism risks creating unintended barriers for new and expanding industries.

The FICCI said this differentiated pricing model presents several challenges. It introduces inequity in energy costs across similar operations, undermines the principle of a level playing field, and could adversely affect Bangladesh's industrial competitiveness at a time when investment momentum is building, said the trade organisation.

In a separate statement, the EuroCham warned that the differential tariff mechanism – based on industrial consumers' contractual timelines and gas connection status – could inadvertently hurt investor sentiment and industrial growth.

In a move to protect investment momentum and stimulate economic activity, the Bangladesh Investment Development Authority (Bida) has formally urged the Bangladesh Energy Regulatory Commission (BERC) to revise the recently introduced "discriminatory" gas pricing and establish an investor-friendly tariff structure.

In a letter sent on 15 April, Bida Executive Chairman Chowdhury Ashik Mahmud Bin Harun requested the active cooperation of BERC Chairman Jalal Ahmed to take prompt action on the matter.

Speaking to The Business Standard, the BERC chairman said, "I have been informed that the Bida chairman has sent a letter regarding the revision of the gas price hike, although I have not yet received it officially."

He added, "As per the existing legal framework, there is no direct scope to revise the newly set gas prices. However, given Bida's concerns, we will bring the issue to the commission's meeting for discussion. We will also seek feedback from stakeholders and consider their opinions before deciding on the next steps."

In the letter, the Bida chairman noted that the Energy Commission, on 13 April, announced new gas tariffs that require new industrial investors to pay up to 33% more for gas than existing consumers. He emphasised that such "discriminatory" pricing could discourage both new investments and fair competition in the market.

He said, "Investors already view this policy as anti-competitive and are voicing their opposition. We believe this decision may adversely affect the flow of foreign direct investment into the country."

While Bida does not oppose the government's broader plan to reduce subsidies, the chairman recommended a more inclusive and non-discriminatory approach to subsidy rationalisation.

Referring to the recently held Bangladesh Investment Summit 2025, the Bida chairman highlighted that over 450 investors and business leaders from 40 countries attended the event organised by Bida. Many expressed strong interest in Bangladesh's investment potential, with several signing MoUs and agreements pledging significant investments.

He added, "A sudden announcement of discriminatory gas price hikes right after such a successful summit is likely to create a negative perception among prospective investors."

On 13 April, the BERC announced a 33% increase in gas prices for new consumers and existing users expanding beyond 50% of their sanctioned load. The new tariff – effective from 13 April – raises the rate from Tk30 to Tk40 per cubic metre for both industrial use and captive power generation.

With this adjustment, new industrial consumers and those scaling up production will now have to pay Tk10 more per unit of gas, adding fresh cost pressures amid a volatile macroeconomic environment marked by high inflation, weak credit growth, and declining investment.

Following the gas price hike, the Foreign Investors' Chamber of Commerce and Industry (FICCI) and the European Union Chamber of Commerce in Bangladesh (EuroCham) expressed concerns over the BERC's gas tariff structure, which differentiates between new, committed, and existing customers within the same industrial category.

In a statement issued on Tuesday (15 April), the FICCI said the newly announced tariff mechanism risks creating unintended barriers for new and expanding industries.

The FICCI said this differentiated pricing model presents several challenges. It introduces inequity in energy costs across similar operations, undermines the principle of a level playing field, and could adversely affect Bangladesh's industrial competitiveness at a time when investment momentum is building, said the trade organisation.

In a separate statement, the EuroCham warned that the differential tariff mechanism – based on industrial consumers' contractual timelines and gas connection status – could inadvertently hurt investor sentiment and industrial growth.