MCCI for not reducing subsidy on energy for at least one more year

The Metropolitan Chamber of Commerce and Industry (MCCI) urged the government not to reduce subsidies on energy for at least one more year to keep up the competitive edge of the businesses due to the impacts of the Russia-Ukraine war and the shocks of the pandemic.

MCCI President Md Saiful Islam raised the demand while addressing a networking luncheon with the journalists held at the MCCI building in the capital’s Motijheel area.

He said that the International Monetary Fund (IMF) might have suggested the government for reducing subsidies on energy. “But, to keep up with the competitive edge of the businesses and keep the energy price at a tolerable level, the energy subsidy should be kept for at least one more year and not be reduced at any cost during this period,” he added.

He also urged the government not to keep the price of local gas as per the price of imported energy.

The IMF has already confirmed credit support of $4.7 billion to Bangladesh. In the current fiscal year (FY23), the government has set a target of providing a subsidy of Taka 17,000 crore in energy, especially for Taka 6,000 crore against the import of LNG.

But, due to global price adjustment owing to the current global condition, the concerned government bodies have already sent a subsidy demand of Taka 32,500 crore in the power sector and Taka 19,358 crore in the energy sector.

The MCCI leaders opined that Bangladeshi entrepreneurs would have to pay an additional 9%-17% tariff on the export of products following the graduation from the LDCs in 2026.

In this connection, the MCCI president said if diversification is ensured and productivity is increased in exportable items and markets, then the competitive edge could be enhanced by 15-17%.

Answering a question, Saiful said there is no bar from the central bank to open up LCs. But, in a real sense, commercial banks are not able to open up LCs quickly.

Replying to another question, the MCCI president said that the field-level staff of the National Board of Revenue (NBR) would have to be more business-friendly.