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Proposed electricity tariff hike will slow down growth in economy: DCCI
24 Sep 2017

Electricity is indispensable energy and critical resource for modern life and a vital infrastructural input for economic development. Uninterrupted electricity supply is the key for consistent economic growth of cross section industrial, agricultural and service sector in Bangladesh.


Considering recent move to increase electricity tariff, the proposed electricity price hike at consumers’ level by distribution companies will increase the retail electricity price maximum Tk. 10 from Tk. 9.16 at SME, Tk. 12.98 from Tk. 11.98 for commercial users and from Tk. 9.52 to Tk. 10.32 for large industry and Tk. 6.10 from Tk. 5.63 for average domestic users.


Against the claim of tariff hike to offset the loss incurred by Bangladesh Power Development Board (BPDB), price at industrial and commercial consumers’ level is around 180% higher than the generation cost which does not justify proposed tariff hike at consumers’ level. In order to offset the loss incurred by BPDB, electricity tariff may be increased at distribution level keeping unchanged the consumers tariff. This equilibration of price-parity will endorse a people-centric inflationary balance.


It has been evident that in private sector Furnace Oil/Heavy Fuel Oil (HFO) based power plants can import HFO at a rate of relatively 90 percent lower over import of BPC based on current import trend. In this backdrop, DCCI urges Government for allowing private sector more to import HFO for ensuring minimum generation cost.  DCCI also urges for strengthening operational efficiency and management of public sector power plants, engaging private sector in power transmission and distribution operation to minimize the distribution loss without putting tariff rise led pressure at consumers’ level.


DCCI feels that due to tariff hike almost all power intensive manufacturing industries will be adversely affected especially SMEs, steel re-rolling mills, textile sector will face average 8 to 10 percent production cost hike. Being the voice of the SMEs in Bangladesh, DCCI is concerned on the proposed initiative of electricity price hike. It will affect the low-cost industrial productivity strength of Bangladesh. It will also impede massive infrastructure development work, export competiveness and limiting thrust industry diversification and will increase cost of doing business which may hurt the incremental growth of SMEs as well as local and foreign investment above all inflating the cost of living of mass people across the country.


Voicing the pro-business promise of the Government, DCCI requests the concerned Government agencies to revoke the tariff hike proposal and undertake endeavour for constituting an ‘Energy Monitoring Committee’ as well as a long-term energy road map to be shared with all stakeholders forecasting the future cost of energy as low cost and reliable energy security which will ensure low, reliable and affordable electricity supply stimulating private sector investment-led economic growth and drive the country to the league of middle income country by the year 2021 envisioned by the Government of Bangladesh.

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