Home ›› 06 Jun 2022 ›› Front
The Bangladesh Energy Regulatory Commission on Sunday increased prices of natural gas by 22.78 per cent on an average amid growing commotion over inflation and increase in commodity prices.
The commission announced the fresh rates through an online press briefing and the new prices have come into effect from June 1.
Now, consumers have to pay Tk 9.80 to Tk 11.91 per cubic foot (cft) of gas.
The household consumers will have to pay Tk 990 instead of 925 for a single burner and Tk 1,080 for a double burner instead of Tk 975. For pre-paid meters, the price has increased from Tk 12.60 per cft to Tk 18 considering that the user would use 60 cft of gas in a month.
In the public hearings held on March 21-24, the commission had proposed a 20 per cent increase in gas prices but it finally increased the price by 22.78 per cent. Prices of gas used in small and cottage industries and Compressed Natural Gas used by transport has not been increased.
The commission said it did not increase the CNG price considering the suffering of passengers and the gas used in the SME sector to flourish this sector.
Mohammad Abu Faruque, acting chairman of BERC, told the news briefing that neither the commission nor the government had any option but to increase the cost of importing high priced LNG.
In January, Petrobangla and six of its gas distribution companies applied to the commission to increase gas prices by 117 per cent and the commission held a public hearing on the issue from March 21 to 24.
The technical committee of the commission recommended a 20 per cent hike in gas prices, which drew flak from different political parties, trade bodies and social organisations.
The Consumers Association of Bangladesh (CAB) at the public hearings said if the theft of gas had been reduced, it would not have been necessary to import 63 mmcfd LNG and there is an opportunity to reduce the price by Tk 0.16 per cube metre.
The Federation of Bangladesh Chambers of Commerce and Industry and the Bangladesh Knitwear Manufacturers and Exporters Association on Sunday thanked the government increasing gas prices at bearable level. Besides, the Consumers’ Association Bangladesh (CAB) apprehended that prices of different commodities would go up further following the gas price hike.
In a statement, FBCCI president Md Jashim Uddin called upon the distribution companies to ensure uninterrupted gas supply to keep the factory production incessant. He thanked Prime Minister Sheikh Hasina for keeping gas prices rational amid the global turmoil caused by the Ukraine-Russia War and the rising trend of LNG price.
BKMEA president AKM Salim Osman in a statement said, “We can coordinate the fixed gas prices in the apparel sector, and continue knitwear export growth in future,” he also said.
Meanwhile, CAB vice-president SM Nazar Hossain told The Business Post that increasing gas prices amid daily essential prices hike will create a negative impact on people’s lives and livelihoods.
“We thank the authority to reduce the prices for small and cottage industry but our entire market is dominated by large industry. So, we are worried whether the prices of different products go up further,” he added.
Sector-wise new gas price
According to the BERC, the fertiliser factories will face the highest increase in gas tariff by 200.55 per cent. The price of gas used in power plants is increased from Tk 4.45 to Tk 5.02, for captive power plants from Tk 13.75 to Tk 16, for large industries from Tk 10.60 to Tk 11.98, for medium industries from Tk 10.60 to Tk 11.7, for small and cottage industries from Tk 16.04 to Tk 10.8, for tea industries from Tk 10.60 to Tk 11.93, for commercial uses in hotel-restaurant and sectors from Tk 23 to Tk 26.64. The price of CNG remained unchanged.
The price hike for LNG import
In a written statement, Mohammad Abu Faruque said Petrobangla’s LNG import costs about Tk 11,800 crore. Of the amount, Tk 3,300 crore comes from the Energy Security Fund, Tk 2,500 crore from the gas transmission and distribution companies as 17 per cent profit, and Tk 6,000 crore as the government subsidy. The new gas price has been fixed considering these figures.
Abu Faruque said Petrobangla needs Tk 36,780 crore in the gas sector in the current financial year and of the amount, Tk 22, 412 will be spent on importing LNG. With the new bulk price, the Petrobangla will get Tk 7.36 per cft which was Tk 5.73 earlier.
At this price, the income and expenditure of Petrobangla in the next financial year will be equal if the price of LNG in the global market remains normal, he added.
Journalists and business people at the press conference questioned the new price hike when the country is suffering from inflation. They also questioned the unusual system losses (12-14%) of other distribution companies, including Titas, gas theft, illegal connections, and the lack of clear explanations for the increase in domestic gas extraction.
Regarding these, Abu Faruque said people are tired of skyrocketing prices of commodities. “We did not increase the price of CNG considering the suffering of the people. At the same time, there has been a small adjustment for household gas.”
BERC member Maqbool E Elahi Chowdhury said that the price has to be increased again and again only for the LNG import. “As a result, we have no choice but to increase domestic gas production.”
Power price likely to rise
About 58 per cent of the country’s electricity production comes from burning natural gas now. With the gas price hike, the price of electricity will also go up. The commission held a public hearing in May on wholesale power prices. At that hearing, the Power Development Board (PDB) proposed a 75.56 per cent increase in prices at the wholesale level. BERC’s technical committee voted in favour of a 56 per cent price increase.
