BUILD chief warns of cost pressure after electricity price hike, seeks budget support

Electricity price hikes will create pressure on consumers and the industrial sector, with business leaders also calling for compensatory incentives such as tax relief to offset rising costs, said Business Initiative Leading Development (BUILD) Chairperson Abul Kasem Khan.

Speaking to The Business Standard on the issue, he said, "We cannot support an increase in electricity prices at the consumer level without proper justification. Although prices are being raised due to the international market situation, the country's industrial sector is already under various pressures. The cost of finance is also high."

He said that while Bangladesh is able to produce goods at lower costs than some countries in certain cases, energy costs account for a significant share of production expenses. As a result, an increase in electricity prices directly raises production costs.

"Therefore, it is not always possible to increase product prices, because whether returns can be achieved or prices adjusted depends on market dynamics, where supply and demand operate," he added.

Abul Kasem Khan further said, "Broadly speaking, there is little we can do – the cost of production will increase. We hope the government will consider the issue and provide some form of support or compensation in other ways. The additional cost could be partially adjusted through tax relief and other measures."

He added that from the government's perspective, "given the current overall economic situation, the electricity price hike is necessary for cost recovery. However, we expect that in the upcoming budget, if some incentives or concessions are provided, businesses will be able to absorb this additional pressure," he said.