Over the past year and a half, the Bangladesh Energy Regulatory Commission (BERC) has seen its efficacy dramatically decline after the government assumed control over setting the prices of oil, gas, and electricity.
Officials and energy experts claim that despite being established to safeguard public interest in energy products, BERC is now deemed almost powerless. Once a key regulatory body, it now only sets monthly prices for LPG and autogas—yet even these directives are frequently ignored by LPG distributors.
Meanwhile, consumers have alleged that BERC's influence on the market is insignificant, and the commission has stalled on a year-old application from natural gas distributors to adjust [increase] residential gas prices, further underlining BERC's diminished role.
Wishing anonymity, a senior BERC official highlighted the commission's current insignificant position, saying, "Since the day the law was amended in 2022, the commission turned into a dead horse. We can no longer make any decisions even if we wish to."
Some transparency
Established in 2003, the Bangladesh Energy Regulatory Commission (BERC) was formed to ensure fair pricing for electricity, fuel, and petroleum products. State-owned energy companies were required to submit proposals to BERC for any price adjustments.
This process included public hearings, allowing citizens to voice their opinions, thereby upholding some transparency regarding the company's revenues and expenditures. After thorough scrutiny and multiple rounds of evaluation, the commission would then issue its verdict, balancing the interests of both the consumers and the industry.
However, in December 2022, the government took unilateral control over the energy pricing processes through amending the BERC Act imposed in 2003. Despite several urges made by experts and the Centre for Policy Dialogue (CPD), a research organisation, opposing the takeover, the then policymakers did not reconsider their decision.
At a recently held event organised by CPD, its Research Director KhondakerGolamMoazzem emphasised the need to restore the commission's influence in the energy and power sector by saying, "Peoples' rights have been undermined by reducing BERC's authority."
Concealing corruption
Since the amendment of the BERC Act, the government has raised electricity prices multiple times. The Power Division recently announced that electricity rates will now see quarterly increases to adjust subsidies in the power sector. Gas prices have also continued to rise through executive orders. Monthly fuel price adjustments, often leading to price hikes, are justified as necessary to align with international market trends.
Experts argue that these frequent increases are significantly contributing to national inflation.
Renowned energy expert Professor M Shamsul Alam accused the government, noting that by taking away BERC's authority, the government is trying to hide the corruption in the energy sector.
"Now, they [the authorities] are arbitrarily increasing prices, thereby concealing large-scale corruption," the expert alleged.
Indecisive BERC
About a year ago, Titas Gas Transmission and Distribution PLC (Titas Gas) made an application to BERC to increase the gas allocation from 55 cubic metres (Tk 990-worth) to 76.65 cubic metres for single-burner stove connections and from 60 (Tk 1080-worth) to 88.44 cubic metres for double-burner connections.
A portion of the consumers who have gas stoves at home pay their gas bill at the end of the month. They are called non-meter consumers. Another section that has gas meters at their houses pays the bills based on usage. They are called prepaid meter consumers.
Currently, non-meter consumers are billed for a fixed amount of gas, regardless of their actual usage. If Titas's gas allocation is increased, then prices will naturally rise.
Sources concerned with the matter alleged that BERC is in a dilemma regarding Titas Gas's application.
On the one hand, no decision has been made in favour of the application, nor has it been rejected. On the other hand, BERC sources indicate that the fear of the executive branch's whimsy is preventing the commission from making any decisions.
Although the BERC Act does not allow proposals to remain pending for an extended period, no decision has been made as of yet.
BERC issued a gas price increase directive on June 5, 2022. Before that issuance, a public hearing was held in March where the statistics presented of prepaid meter users showed that single-burner stoves averaged 40 cubic metres while the double-burners averaged 50 cubic metres usage.
Based on this data, the allocation was reduced from 73.41 cubic metres to 55 cubic metres for single-burner connections and from 77.41 cubic metres to 60 cubic metres for double-burner connections.
Data doesn't support Titas's claims
However, 10 months later, Titas Gas objected to BERC's decision, stating that the regulator determined the gas allocation without conducting any survey or data analysis with the approximately 2.5 million non-metered customers. This resulted in increased technical and financial losses for the profitable state-owned Titas Gas Transmission and Distribution PLC.
To that end, Petrobangla, the state-owned Bangladesh Oil, Gas and Mineral Corporation, stated that there are about 4.4 million residential gas customers nationwide, with about 5,00,000 of them using prepaid meters. The prepaid meter users' data does not support the gas companies' claims. Most statistics show that prepaid customers use an average of less than 30 cubic metres of gas.
Echoing Petrobangla's statement, former BERC member Maqbul E-Elahi Chowdhury said that Titas Gas's complaint about the gas allocation is invalid as he believes the allocation should be even lower based on the data from prepaid meter users.
BERC Chairman MdNurul Amin has remarked that the delay in Titas Gas's application was due to missing documents, which Titas took its time to provide. A review committee is currently working on the matter.
