MCCI seeks fuel subsidy for another year
The MCCI also stressed that immediate LCs were not being opened
The Metropolitan Chamber of Commerce & Industry, Dhaka (MCCI) has urged the government to delay implementing the International Monetary Fund (IMF) condition by at least another to help businesses maintain competitiveness amid the impacts of Covid-19 and the Russia-Ukraine war.
At a views exchange meeting with journalists at its Motijheel office in the capital on Saturday, the organisation of traders said the subsidy can be kept as the pressure on the balance of payments was reducing owing to improving reserves and exports.
MCCI President Saiful Islam, at the discussion titled Networking Lunch, also asked for clarification on the government statement that fuel price would be fixed every three months in line with the world market.
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He also urged to not keep local natural gas prices equal to imported ones.
The MCCI also stressed that complications related to opening import letters of credit (LC) still existed.
Noting that post-Least Developed Country (LDC) graduation in 2026, Bangladesh will have to pay an additional 9-17% tariff, the MCCI, however, said with good governance, productivity, export products, and market diversification, the competitiveness of Bangladesh can increase up to 15-17%.
As a result, the MCCI believes that it will be possible to tackle the challenges of LDC transition.
In response to a question from journalists, the MCCI president brought up the issue of complications in opening LCs.
He said the central bank maintained there was no embargo on opening LCs, but in reality banks were not willing to open "immediate" LCs.
At the session, the logistical weaknesses and the arbitrary attitude of field-level officials of the National Board of Revenue (NRB) also came up.
The MCCI president said, "Revenue officers at the field-level decide fates [of businesses]. The NBR's goodwill is being eroded because of this."
The IMF has made the government's subsidy reduction conditional for the $4.7 billion loan to Bangladesh.
In the current fiscal year 2022-23, the government has allocated Tk17,000 crore of the budget for power subsidy and Tk6,000 crore subsidy for LNG imports.
However, due to the increase in prices in the world market due to various reasons, including the war, various related institutions have demanded the government to provide subsidies of Tk32,500 crore to the power sector and Tk19,358 crore for imports of fuel oil.
The finance ministry, however, is not in favour of giving any money beyond the allocation.
Even before the IMF approved the loan, the government hiked electricity prices by 10% and gas by as much as 179%.
As a result, the government subsidy is expected to fall further while fuel price rises the world over.
