Dhaka: The Federation of Bangladesh Chambers of Commerce and Industry ( FBCCI ) has expressed concern over the proposed gas price hike saying it is likely to have a detrimental effect on the investment and industrialisation prospects of the country.

The proposal, if implemented, will in turn hinder the overall growth capacity of the Bangladesh economy, the apex trade body said in a statement on Saturday.

The FBCCI said it is aware that 74 percent of the country's energy needs are met through natural gas and therefore it is imperative that the hike in gas prices will increase the costs of investment, production, and overall business activity.

The apex trade body said the gas price hike will also affect the export oriented industries, agriculture, steel, fertiliser, independent power producers, real estate and all other service sectors of the country.

‘Apart from that, investors in heavy industries like LNG & LPG are already facing difficulties in preparing their business growth and investment plans due to the proposed gas price hike,’ said the FBCCI.

In this context it is important to identify the other challenges of gas production and efficiency instead of adopting higher price policy, the trade body said.

The prevalent problems associated with the gas sector could be solved by effectively addressing the issues of illegal gas connection, system loss, illegal billing activities, etc rather than just increasing the price of gas.

According to the latest Bangladesh Economic Review, the estimated use of gas from 2016-2020 in the CNG, tea, commercial and fertilizer sectors will remain the same.

However, the gas consumption of industry, power and house hold use is forecast to increase. The use of gas for captive power will decrease, according to the FBCCI.

It said the business community is working hand in hand with the government to enhance the industrial sector contribution to GDP to 37 percent by 2021 from the present contribution of 31.54 percent.