Rod to get costlier by Tk1,200 to Tk3,500 a tonne

Building a home, bridge, or undertaking any other construction project will become costlier from 1 February following yesterday's record hike in gas prices as steel and other construction materials are also set to become costlier.

According to the government notification, large and medium industries that use gas must pay an additional 150% and 155% for gas.

Major players in the steel industry will fall under these two categories.

If the mills have captive power plants run by gas, they will have to pay 88% more bills.

"I am utterly shocked," said Manwar Hossain, chairman of Anwar Group, which has exposure in gas-consuming cement, steel and textile industries.

Manwar was a campaigner for a gas price hike (to ensure supply), but the way the government has done it was beyond his imagination. 

He expected a 10%-20% hike but hadn't even anticipated hikes of 150%-180%.

Now per tonne rod (steel bar) will be costlier by Tk3,500, putting producers and consumers in further strain, he said. 

Presently, the price of a tonne of 60-grade rod stands at around Tk90,000, up from Tk54,000 two years ago.

He said the government might have hiked the gas prices without assessing the financial impacts on the businesses and individuals.

Tapan Sengupta, deputy managing director of BSRM, one of the country's largest steel producers, said per tonne rod price will shoot up by Tk1,200 for the latest gas price hike.

He said the price hike may further dampen demand when businesses and individual consumers are already going through uncertain times amid high inflation.

Another miller, wishing not to be named, said the IMF (International Monetary Fund) wants no losses and subsidies in energy prices. For that reason, the government has increased gas prices massively after hiking electricity prices a few days ago.

The government has hiked gas prices by up to 179%, eliminating subsidies to cut fiscal deficit, in hopes of securing $4.5 billion loans from the International Monetary Fund, according to some businesses.

Prime Minister Sheikh Hasina on Wednesday, however, told Parliament that the loan Bangladesh was taking from the IMF had no significant conditions attached to it.