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Hike in fuel price leads garment production cost to soar

03 Jul '08
1 min read

Adjustments in feul prices have raised concerns about a likely rise of 15 percent in the production costs of exportable apparel items.

Mr Shahidul Islam, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President told at a press conference in Dhaka, “The government should keep the petroleum prices at their previous rates at least for industrial uses to minimize our production costs”.

The situation became worse for the industry especially since the hike came into effect at a time when the prices of other essential commodities had already increased significantly. This may lead to labor unrest which will in turn hamper production at the manufacturing units.

Domestic fuel prices have been increased by 33 to 37 percent from July 1 to match up with prices in the international market. As a result, the apparel manufacturers will have to bear an additional cost of Tk50 crore per month.

Insufficient and erratic gas and power supplies have forced garment manufacturers to remain heavily dependent on petroleum products. However, now that the prices for these have also increase, the industry would have to reel under severe pressure.

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