Petrobangla's plans to hike gas prices evoke criticism

Bangladesh Energy Regulatory Commission (BERC), the energy watchdog, yesterday accepted the proposals of gas price hike from Petrobangla amid criticism from consumer rights groups, independent experts and users.
Mohammad Imdadul Haque, acting chairman of BERC, said although the commission has accepted the Petrobangla proposals, it does not mean that the prices of gas have been increased.
He said the commission would hold a public hearing with all stakeholders on December 10 on the proposals.
"The prices will be decided after the public hearing where all stakeholders will get opportunities to make their case," he said at a meeting in his office in the city.
At the meeting, Consumers Association of Bangladesh (CAB), a consumer rights protection group, along with independent experts and users requested the commission to send back the proposals to Petrobangla.
At the request of the CAB, Haque asked the distributing gas companies to come up with their respective price hike proposals.
Nurul Islam, a former professor at Bangladesh University of Engineering and Technology (Buet), said the commission must stick to the laws; otherwise it would be controversial.
Prof Dr M Shamsul Alam, an energy adviser to the CAB, threatened that the group would not take part in the hearing if the distributing companies do not submit their own price hike proposals.
He said, under the current law there is no way to take into consideration the proposals of Petrobangla.
Monjurul Hoq, chairman of Mintex Fashion Ltd, said Petrobangla has proposed to increase the price of gas at a time when the industries are not getting gas at adequate pressure even for four hours a day. "Still, we are paying the full bills," he said.
One industrialist said they have invested hundreds of crores of taka to set up captive power plants to produce electricity from gas.
"If the commission increases the gas prices by more than 100 percent, many industries will fold operation because of a steep rise in production cost."
Salim Mahmud, a member of BERC, said the managing directors of Jalalabad Gas Company, Karnaphuli Gas Company, Pashchimanchal Gas Company, Gas Transmission Company, Titas Gas and Bakhrabad Gas Company have given authority to Petrobangla to proceed with the proposals.
"It seems pre-planned," said Alam of the CAB.
Mahmud also said there is a 'grey area' in the laws and he would look into the issue.
Zakir Hossain Nayan, president of Bangladesh CNG Stations and Conversion Workshop Owners' Association, said it is illegal to raise the prices of gas when the distributing companies are already making profit.
Petrobangla has proposed to set the gas price at Tk 25 per thousand cubic feet, which also drew criticism.
"Who has given Petrobangla the authority to fix the price? Only the parliament can do it," said Islam.
The state-run oil, gas and mineral resources corporation proposed a hike in gas prices to stop inefficient use of the natural energy and adjust prices in line with the international market.
Under the proposal, price of per 1,000 cubic feet natural gas for power plants, including the private ones and those run by Power Development Board, would rise by 5.24 percent to Tk 84, from Tk 79.82.
Petrobangla has proposed a hike in gas prices by 9.71 percent to Tk 80 from Tk 72.92 for fertiliser factories and by 32.60 percent to Tk 220 from Tk 165.91 for industrial users.
Privately-run smaller power plants known as captive power plants will see their tariffs for gas uses go up by 102.94 percent to Tk 240 from Tk 118.26.
Prices have been proposed to be increased by 30.55 percent to Tk 350 from Tk 268.09 for commercial consumers, by 20.55 percent to Tk 200 from Tk 165.91 for tea estates and by 39.10 percent to Tk 905.92 from Tk 651.29 for CNG gas refilling stations.
Petrobangla, however, did not propose any price hike for residential users.
This is the second time the government is going to increase the prices of gas after coming to power three years ago. In 2009, gas prices went up on an average by 11.11 percent.