Govt hikes retail power prices by 5% again

The government again increased retail electricity tariffs by 5 per cent on Tuesday through an executive order. 

The new tariffs will be effective from today while it is the third hike since January.    

The Ministry of Power, Energy and Mineral Resources issued a circular in this regard on Tuesday evening.

This is a fresh blow, especially to the lower and middle income people who are already burdened by soaring commodity prices and high inflation. Many have even reduced their food intake due to a reduction in purchasing power.

Retail electricity prices were increased twice in January. The hikes came into effect in two steps in January and February.

On January 30, electricity prices were increased by 5 per cent at the retail level and 8 per cent at the bulk one. Electricity prices have been raised 11 times at the wholesale level and 13 times at the retail level in the last 14 years.

The government has been adjusting electricity prices every month since this year to deal with the subsidy pressure in the power sector as part of meeting the condition for the International Monetary Fund’s $4.7 billion loan.

Bangladesh Energy Regulatory Commission would previously determine electricity prices through public hearings. But the government recently amended the law to assume this power amid criticisms by experts and the civil society.

Since then, the Power Division under the Ministry of Power, Energy and Mineral Resources has been increasing prices through executive orders.

Bangladesh Power Development Board (BPDB) is the country’s only bulk electricity buyer, which buys from all public and private power plants. It then sells to six power distribution companies at prices slightly below the cost of production.

BPDB says per unit power generation cost is now around Tk 8.5, which is then sold at subsidised rates to distributors.

The board said it had incurred losses of Tk 22,500 crore in the last fiscal year. It recently sought this amount as a subsidy from the finance ministry.

It said it would face big trouble in the upcoming summer in ensuring uninterrupted electricity if it does not get the money.