Bangladesh Energy Regulatory Commission ask not to panic about gas price hike
12:00 AM, March 15, 2019 / LAST MODIFIED: 02:29 AM, March 15, 2019

Don't panic

Energy regulator urges people, hints at hiking gas prices lower than distributors' demand

In the face of strong opposition from consumers, the energy regulator hinted it may raise gas prices lower than that proposed by the distributors as the four-day public hearing on the proposals ended yesterday.

“The commission is independent and will only consider what is necessary,” Monowar Islam, chairman of Bangladesh Energy Regulatory Commission (BERC), said in his concluding statement at the hearing at TCB Bhaban in the capital's Karwan Bazar.

Media reports and analyses on the distribution companies' proposals painted a dismal picture of the sector, he said, urging the entities to come up with proposals they deem necessary to avoid confusion.

“We would like to request people not to panic.”

In the past, the commission never increased tariff as per the distributors' demands, he said.

For example, in 2009 the companies had sought 65.92 percent increase in gas prices at the consumer level, but the commission raised those by 11 percent, Monowar mentioned. 

Similarly, the prices saw a hike of 26 percent against 40.79 percent demanded by the distributors in 2010, and 11 percent against 95 percent sought by them in 2017.

“The companies asked for 75 percent increase in gas prices last year but we didn't raise the prices,” he said.

This time, the distributors are seeking 102.85 percent rise to make up for the losses they will incur for importing liquefied natural gas (LNG), an expensive energy.

The technical committee that evaluated the proposals said there was no need to raise the transmission and distribution charges in the current fiscal year, said Kamruzzaman, deputy director of the BERC.

Considering the supply of 320 million cubic feet per day (mmcfd) of gas through LNG imports, the gas tariff at the consumer level will have to be increased by 10.46 percent to Tk 7.92 from Tk 7.17 per cubic metre in this fiscal year.

The end price of gas has to be raised to Tk 11.77 if gas supply from LNG sources goes up to 650mmcfd in May as forecast by the technical committee. The price needs to be set at Tk 12.43 when the supply hits 800mmcfd at the start of the next fiscal year. 

Pashchimanchal and Karnaphuli gas distribution companies placed their proposals at yesterday's hearing.

Like their peers Titas, Bakhrabad, Jalalabad and Sundarban, the two proposed increasing gas prices to Tk 12.19 from Tk 8.63 per cubic metre, as the average production cost will be Tk 12.19 after blending LNG with locally produced gas.

They called for raising gas price by 80 percent to Tk 1,350 from Tk 750 for a single-burner stove, and to Tk 1,440 from Tk 800 for a double-burner stove.   

At the public hearing, Ruhin Hossain Prince, a central leader of the Communist Party of Bangladesh, said LNG import had been made inevitable by propagating that there is no gas in the country. It was done in the interest of a section of businesspeople and brokers.

“House rent, transport cost, power tariff, fertiliser prices -- all will go up if the proposals are implemented. We can't accept it.”

Md Mizanur Rahman Ratan, general secretary of the Rajshahi chapter of Bangladesh CNG Filling Station & Conversion Workshop Owners' Association, said if compressed natural gas (CNG) prices are increased, the sector would be in big trouble.

Throughout the four-day hearing, the distributors were slammed for corruption, irregularities, and for giving emphasis on profits rather than improving services and bringing more consumers under their networks.   

But Md Harun-Or-Rashid, director (finance) at Petrobangla, the parent company of the transmission and distribution companies, said profit-making is not their ultimate motive.

“We are importing LNG for the sake of people, industries and entrepreneurs,” he added.

Gas Transmission Company Ltd (GTCL), a state-run transmission firm, seeks to increase the transmission charge to Tk 0.5665 per cubic metre in the current fiscal year from Tk 0.4235.

Imported LNG will cost the country Tk 39.086 per cubic metre. It now buys the same amount of gas for Tk 0.7097 from state-run Bangladesh Gas Fields Company Ltd, for Tk 3.0414 from Bangladesh Petroleum Exploration and Production Company Ltd, for Tk 0.2028 from Sylhet Gas Fields Ltd and for Tk 2.55 from international companies operating in Bangladesh, according to Petrobangla.

Consumers can send their opinions about the proposals to the BERC by March 20.

BERC members Rahman Murshed, Mahmudul Huq Bhuiyan, Md Abdul Aziz Khan and Md Mizanur Rahman were also present at yesterday's hearing.

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