LPG, CNG Traders: They want to ‘approve’ new entrants
LP gas importers, distributors and CNG filling stations owners want a new clause in BERC License Regulations requiring their certificates for any new entries in this sector.
In a written proposal to the Bangladesh Energy Regulatory Commission (BERC), CNG Filling Station and Conversion Workshop Owners' Associations yesterday requested to include membership certificates of the association among other documents required to be a new licensee.
BERC organised a public hearing at their head office, after the proposal was placed before them, to make necessary reforms in it's Licence Regulations 2003, where the owners of different CNG and LP gas companies demanded the new clause.
They attached a commerce ministry gazette dated June 22, 2017, saying that all authorised CNG stations must get the membership of the CNG Filling Station and Conversion Workshop Owners' Association.
After their proposal, Zakaria Jalal, executive director of Basundhara LPG, demanded a similar clause for LPG companies.
In the liquified petroleum gas sector, LPG Operators' Association of Bangladesh (LOAB) is controlling the market along with new entries, claimed the concerns. They said BERC set prices for LPG but couldn't implement them for this reason.
Experts, however, said if the BERC caves in to these demands, it will legalise the "syndicate" that currently controls the sector.
"This kind of proposal and practice are conflicting with the BERC's act," said Prof Shamsul Alam, energy adviser of Consumers' Association of Bangladesh.
Contacted, High Court lawyer Barrister Tureen Afroz told the Daily Star that such proposals constitute conflict of interest.
"The Commission is the absolute authority to issue a licence. Here, if I say it's mandatory to join an association to get a license, it means the associations would be the regulating authority here. There will be a syndicate who will decide whom to include or not."
She added if BERC includes the proposal in new regulations, the associations will control the whole market which is a violation of the competition act.
According to clause 15 of the Competition Act, 2012, no person shall, directly or indirectly, enter into any agreement or collusion, in respect of production, supply, distribution, storage or acquisition of any goods or services, which causes or is likely to cause an adverse effect on competition or creates monopoly or oligopoly in the market.
BERC Chairman Md Abdul Jalil and member (gas) Md Maqbul-E-Elahi Chowdhury said such a clause could be a contradiction with the Competition Act, 2012, and so they will talk to the authorities concerned.
At first BERC member (Admin, Finance and Law) Mohammad Abu Faruqe presented the background of this public hearing. He said they have changed some of the clauses of the BERC regulations 2003 in 2016 "mistakenly" without the law ministry's permission and published a gazette in this regard without the ministry's vetting.
After that, they started the process of rectifying the mistake in 2017.
The process slowed down during the pandemic, but they are now following every step of reforming the regulations, including pre-publishing, public hearing and sending it to the law ministry for their vetting for a Statutory Regulatory Orders (SRO) number, he said.
The 2016 Regulations had no SRO number.
During the public hearing yesterday, the representatives of different electricity, gas or petroleum companies placed their demands to reduce the license fees or renewals.
Some of them wanted the renewal of licenses after at least three to five years instead of existing one year. Some demanded changing their licensing categories, while some wanted the reduction the penalty.
The Draft Regulations have a clause -- 15 (B) -- where they mentioned the Commission could change the fees from time to time.
Two of the attendees demanded the withdrawal of the clause or the inclusion of a line that the commission could change the fees after a notification issued within a specific period and speaking to those concerned.
Chairman Abdul Jalil said that they will notify before any change.
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