A hike in the price of fuel will hurt production and transportation costs in Bangladesh’s clothing sector and affect its competitiveness, manufacturers have warned.

More than 5000 garment-making factories will have to pay an extra US$22m annually to use diesel-run generators, according to estimates from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). 

“We [also] have to pay more for transportation following fuel price hikes,” Shafiul Islam Mohiuddin, president of the BGMEA, told just-style.

He added that this is putting additional pressure on apparel makers who have seen overall production costs jump 12% in the last two years.

“Many export orders were already confirmed prior to the hike in prices of petroleum products,” added Atiqul Islam, BGMEA former-vice president. 

He urged the government to roll-back prices of diesel and furnace oil to ensure stability in the readymade garment (RMG) sector.

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At the beginning of January the government increased the price of diesel and kerosene by 11.5% to BDT68 (US$0.85) per litre, and octane and petrol by 5.32% to BDT99 (US$1.24) a litre.

It is the fifth fuel price hike since the Awami League-led government came to power in December 2008.