Gas price hike to slow industrial growth, deter investment: Business leaders, economists | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Thursday
June 12, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
THURSDAY, JUNE 12, 2025
Gas price hike to slow industrial growth, deter investment: Business leaders, economists

Energy

Mizanur Rahman Yousuf
15 April, 2025, 10:25 pm
Last modified: 15 April, 2025, 10:26 pm

Related News

  • Gas price hike puts manufacturing sector under pressure: BUILD
  • Industrial gas price hiked 33%, businesses fear added cost pressures
  • Business leaders oppose gas price hike move
  • Gas price hike bid draws stiff resistance from stakeholders
  • Proposed gas price to harm businesses greatly, investors warn

Gas price hike to slow industrial growth, deter investment: Business leaders, economists

The new pricing structure is discriminatory, business leaders say

Mizanur Rahman Yousuf
15 April, 2025, 10:25 pm
Last modified: 15 April, 2025, 10:26 pm
Representational image of a flare stack at a gas field. Photo: Collected
Representational image of a flare stack at a gas field. Photo: Collected

Highlights:

  • Gas price for new industrial connections raised from Tk30 to Tk40 per unit
  • Captive power plants to pay Tk42 per unit — up from Tk31.50
  • Industries exceeding approved gas load will face even higher tariffs
  • Textiles, cement, steel, ceramics, and food processing to feel the brunt of the hike
  • Business leaders warn of rising production costs and eroded competitiveness

The government's latest hike in gas prices — by as much as 33% for new industries and a sharp increase for captive power use — is likely to push up production costs across manufacturing sectors, potentially eroding Bangladesh's industrial competitiveness and discouraging fresh investment, business leaders and economists have warned.

Under the new pricing structure, captive power plants — widely used in the export-oriented manufacturing sector to ensure uninterrupted electricity — will now pay Tk42 per unit, up from Tk31.50. 

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Industrial gas connections have also seen a steep rise, from Tk30 to Tk40 per unit. For new industrial connections approved after 13 April, the gas price has been raised by Tk10 per unit — a 33% jump.

The revised structure goes further: existing industries will now be penalised for consuming more than their approved gas load. Even those with promised industrial connections will be charged at a higher rate if their consumption exceeds 50% above the sanctioned load.

Terming the new structure "discriminatory," industry insiders say the impact will be particularly harsh for energy-intensive sectors such as textiles, cement, steel, ceramics, and food processing — many of which rely on captive power to maintain cost control and output consistency in the face of grid unreliability.

They have also urged the government to implement a unified gas pricing system.

Industrialists raise alarms

Industry leaders echoed these concerns, warning that the new pricing structure, which they believe is discriminatory, will hurt competitiveness and deter investment.

"This discriminatory pricing will significantly slow down industrial growth. The 33% hike will raise steel production costs by around 15%, which will certainly affect market prices," said Sumon Chowdhury, secretary-general of the Bangladesh Steel Manufacturers Association.

He also noted that industries using captive power will see costs rise dramatically. "They'll now pay Tk 42 per unit, up from Tk 31.50, which is a huge increase."

However, Tapan Sen Gupta, deputy managing director of BSRM, offered a slightly different take. "Most steel plants are operating at around 50% capacity right now, so the price hike won't have an immediate impact. But once demand rises, it will affect production costs and prices."

Mohammed Amirul Haque, managing director and CEO of Premier Cement Mills Ltd, said the industrial sector has already been struggling with sluggish growth for the past year. "This gas price hike will slow things down further, including job creation," he warned.

"It's puzzling that the government announced this hike just days after hosting an Investment Summit. If new industries are forced to pay more than existing ones, what's the incentive to invest?" he asked.

Belyet Hossain, former director of the BGMEA, also criticised the move. "The textile and dyeing industries will suffer under this new pricing. The readymade garment sector may be less affected, but other segments won't be spared."

Economists also see risks to growth, investment

Economists have raised alarms that the move may disrupt the level playing field between new and old industries, leading to investment uncertainty and slower GDP growth.

"The current investment climate is already under pressure. In the first six months of the current fiscal year, foreign investment was only $213 million, down sharply from $744 million during the same period last year," said Naim Hasan Chowdhury, an associate professor at the Department of Economics, University of Chittagong.

He also pointed to declining private-sector lending. "Private sector bank loan growth fell to 6.82% in February — the lowest in a decade. Between July and February, capital machinery imports declined by about 25%, and long-term industrial lending has also dropped," he said.

"Given this backdrop, a gas price hike will further discourage both local and foreign investment, impacting employment and overall economic momentum," Naim Hasan added.

Noting the inflationary risks, Alauddin Majumder, a professor at the CU Department of Economics, said, "Higher gas prices will increase production costs, which will translate into higher product prices and inflation."

He called for a unified pricing system to prevent discrimination and ensure a fair, competitive environment.

Gas supply crunch hits Ctg amid price hike

While prices have gone up, the gas supply in Chattogram has been cut. Karnaphuli Gas Distribution Company Ltd (KGDCL) has already halted supply to the state-run Chittagong Urea Fertiliser Limited (CUFL) due to a shortage of LNG.

Officials say LNG imports from the global market have slowed, reducing daily supply from the Maheshkhali terminal from 1,000 million cubic feet to just 750 million. To meet the increased summer electricity demand, more LNG has been diverted to the Dhaka region, worsening shortages in Chattogram.

Bangladesh's total daily gas demand is 4.1 billion cubic feet, while Petrobangla can supply only 2.55 billion — about 62% of the requirement. Around 25% of the supply comes from imported LNG.

Chattogram, which relies entirely on imported LNG, has a daily demand of 400 million cubic feet, but the current supply ranges from 280 to 320 million cubic feet. With no access to gas from domestic fields in Sylhet or Cumilla, the region faces heightened vulnerability.

An Energy Division official, requesting anonymity, confirmed that diverted LNG has been used to boost power generation. "With summer's arrival, the government is prioritising electricity generation," the official said.

Currently, only the Shikalbaha thermal power plant in Chattogram receives around 30–35 million cubic feet of gas daily. Until new LNG shipments arrive, gas pressure will likely remain low, affecting CNG refueling stations, industries, businesses, and households.

Call for unified pricing

Industry leaders have urged the government to implement a unified gas pricing system to eliminate unfair advantages and restore investor confidence.

"This dual pricing model will burden new investors and dampen FDI, particularly in gas-reliant industries like steel, cement, glass, and fertilizer," said BSRM's Tapan Sen Gupta.

As Bangladesh strives to boost industrial growth and attract investment, stakeholders stress that energy policy must be fair, predictable, and supportive of long-term economic goals.

Bangladesh / Top News

gas price hike

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Saifuzzaman Chowdhury. Photo: Collected
    UK crime agency now freezes assets of ex-land minister Saifuzzaman: AJ
  • Chief Adviser Muhammad Yunus speaks at the Chatham House in London on 11 June 2025. Photo: CA Press Wing
    No desire to be part of next elected govt: CA Yunus
  • File photo of BNP Standing Committee Member Amir Khasru Mahmud Chowdhury. Photo: Collected
    Khasru flies to London ahead of Yunus-Tarique meeting

MOST VIEWED

  • Illustration: Duniya Jahan/ TBS
    Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon
  • A file photo of Bangladesh Bank Governor Dr Ahsan H Mansur. Photo: Collected
    'I have no relation with this': Ahsan Mansur debunks Joy’s allegations over daughter’s Dubai flat
  • Faiz Ahmad Tayeb. Photo: BSS
    Import duty on raw materials for e-bikes, lithium batteries reduced from 80% to 1% in some cases: Faiz Taiyeb
  • File photo of ex-prime minister Sheikh Hasina and her son Sajeeb Wazed Joy. Photo: Collected
    Joy spends Eid with Hasina in India: Indian media
  • Mercantile Bank withholds dividend amid Tk1,700cr provision shortfall
    Mercantile Bank withholds dividend amid Tk1,700cr provision shortfall
  • Shakil Ahmed. Photo: Collected
    DU student allegedly hangs himself following threats over old derogatory comment about Prophet on Facebook

Related News

  • Gas price hike puts manufacturing sector under pressure: BUILD
  • Industrial gas price hiked 33%, businesses fear added cost pressures
  • Business leaders oppose gas price hike move
  • Gas price hike bid draws stiff resistance from stakeholders
  • Proposed gas price to harm businesses greatly, investors warn

Features

Among pet birds in the country, lovebirds are the most common, and they are also the most numerous in the haat. Photo: Junayet Rashel

Where feathers meet fortune: How a small pigeon stall became Dhaka’s premiere bird market

8h | Panorama
Illustration: Duniya Jahan/ TBS

Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon

1d | Features
File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar

Dhaka: The city we never want to return to, but always do

2d | Features
Photo collage shows political posters in Bagerhat. Photos: Jannatul Naym Pieal

From Sheikh Dynasty to sibling rivalry: Bagerhat signals a turning tide in local politics

4d | Bangladesh

More Videos from TBS

Why is Omicron XBB more contagious?

Why is Omicron XBB more contagious?

5h | TBS Stories
What did Dr. Yunus say at the Chatham House Dialogue in London?

What did Dr. Yunus say at the Chatham House Dialogue in London?

6h | TBS Today
News of The Day, 11 JUNE 2025

News of The Day, 11 JUNE 2025

7h | TBS News of the day
WB predicts worst decade for global growth since 60s

WB predicts worst decade for global growth since 60s

8h | TBS Stories
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net