Power tariff hiked
The Bangladesh Energy Regulatory Commission (BERC) yesterday increased the retail power tariff by 15 percent to Tk 5.75 per unit amid opposition from consumers.
The new hike is effective from September 1.
However, the regulator withdrew its "punitive" geometric billing rate imposed in March on consumers who use electricity of more than 400 kilowatt hours (units).
This withdrawal would practically reduce bills and prevent sharp rise in bills, officials said.
BERC also increased the bulk electricity price by 16.92 percent to Tk 4.70 per unit, mainly to cut subsidies in the power sector.
At present the per unit price of electricity at retail level is Tk 5 while the bulk price is Tk 4.02 per unit.
This is the sixth increase in power tariff by the present government since it assumed office in 2009 and the fourth in a single year.
"We have no plan to increase the power price in the next one year, unless petroleum prices go up in the international market," BERC Chairman Syed Yusuf Hossain said, as he announced the new tariffs at a press conference at his office in the capital.
The power prices might be reduced later if petroleum got cheaper in the international market, Hossain said.
The energy regulator widened the tariff slabs to six from the existing three to make slab facilities available to all consumers.
The slabs are zero to 75 units, 76 to 200 units, 201 to 300 units, 301 to 400 units, 401 to 600 units and the sixth from 601 units and above.
The hike in power tariffs is much lower than the distributor companies had proposed.
The Power Development Board had proposed increasing the retail tariffs by 57 percent while distributing companies or bulk users had proposed raising bulk tariff by an average of 54 percent.
Hossain said the government was planning to set up an "Energy Support Fund" with part of the profits from electricity.
According to the geometric billing system, a consumer had to pay Tk 3.05 for a unit of power if the total monthly usage was within 100 units. In the second slab from 101 to 400 units, a consumer had to pay Tk 4.29 per unit and a user consuming 401 units and above had to pay Tk 7.89 per unit.
This meant that for a consumer who used above 400 units, the entire bill was calculated at the rate of the third slab. Thus he saw a big leap in the bill from that of the person who used below 400 units.
Now, if one consumed more than 600 units, the bill would be calculated at six different rates of six slabs of power use, Salim Mahmud, a member of BERC, told The Daily Star.
He said people who were currently using 450, 550, 650 and 750 units would see their bills decrease by Tk 1,350, Tk 1,326, Tk 1,247 and Tk 1,100. Consumers in the lower slabs will, however, see their bills go up by between Tk 21 and Tk 134.
Salim said the commission had not listened to the distributors. "We have only increased the tariffs by less than one third of what they demanded."
Expressing resentment over the latest hike in power tariffs, the main opposition BNP said by increasing the prices for the 6th time in the last three and a half years, the government has showed its despotic mentality.
In a statement issued yesterday, acting secretary general of BNP Mirza Fakhrul Islam Alamgir said the present government is making life miserable for people.
“The government has brought the sector to the edge of destruction by setting up quick rental power plants,” he added.
Experts and consumers rights groups voiced concerns that ordinary people might feel high inflationary pressure, though the increase in the retail power tariffs was much lower than expected.
Akbar Ali Khan, a former caretaker government adviser, said the lower-middle class would be the worst sufferers of the inflationary pressure caused by the power price hike.
"There might be some relief built into the tariff, but the ultimate thrust of the government is to raise more revenues, which will hurt people," he told The Daily Star.
The former finance secretary criticised the government for frequently raising power tariffs.
"It is very bad policy that you have increased the prices six times [since coming to power in 2009], which creates inflationary fears." Also, prices should not be increased so many times in one year.
Prof M Shamsul Alam, an energy adviser to the Consumers' Association of Bangladesh (CAB), said the logic behind the power tariff hike was to cut the deficit between production and the retail cost.
"It was said that even if the retail tariffs were increased by 50 percent per unit, subsidies would be Tk 0.85 [per unit]. Now the rate has been increased by about 17 percent. So, the deficit will continue," he said.
Shamsul, who is head of the electrical and electronic engineering department of Daffodil International University, added that due to the power price hike, the cost of production at all levels would go up.