Says higher fuel prices are increasing production costs
News Desk : dhakamirror.com
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) recently called for the government to cut the price of diesel as the cost of doing business has risen significantly amid an increase in fuel oil prices and ongoing load shedding.
Due to load-shedding, a lot of local and export-focused textile mills, garment manufacturers, and other businesses have been operating on diesel generators. Owing to this, local industrial enterprises production costs have increased dramatically at a time, when the economy is being negatively impacted by the Russia-Ukraine war.
Diesel sold at Tk 80 per litre in domestic markets last year but this year, the government increased the price of the widely consumed fuel to Tk 109 per litre. So, various industries have been struggling to remain productive while managing their soaring operational costs.
“The government should readjust the price of diesel in local markets as the price of petroleum products has already declined significantly in international markets,” BGMEA President Faruque Hassan said in a letter to the prime minister on October 3.
Hassan then informed that BGMEA member factories have been following the staggered weekly holiday policy as per the government’s instruction since August 11 to save on electricity consumption.
Besides, the BGMEA is devising a roadmap to export clothing items worth $100 billion by 2030, he added.
To reach this target in the stipulated time, the BGMEA has taken initiatives such as reducing carbon emissions, using sustainable raw materials, reducing groundwater and energy usage, and increasing the use of renewable energy.
However, the continued use of expensive diesel fuel for powering machines will affect the achievement of this target.
The sector’s current contribution to national exports is 82 per cent with shipments worth $42.61 billion having gone abroad last year, up from $12.49 billion in fiscal 2009-10, the letter said.
Oil prices settled lower on Thursday amid choppy trading, rising above $90 per barrel and then retreating as traders weighed a worsening economic outlook against potential OPEC+ output cuts next week, according to a Reuters report dated September 29.
Brent crude futures settled down 83 cents at $88.49 per barrel, after rising as high as $90.12 during the session. Meanwhile, US crude futures for November settled 92 cents lower at $81.23 a barrel, it said.
The Organization of the Petroleum Exporting Countries and its Allies, or OPEC+, have started conversations about reducing oil output at their upcoming meeting on October 5.