Multiple regulators leading to increased tariffs in energy sector

According to industry insiders as well as consumer rights groups, consumers have to bear the brunt  of huge amounts paid in fees annually by the business operators.

As per a presentation made by the president of LPG Operators of Bangladesh (LOAB) Azam J Chowdhury at a recent seminar, any bulk liquefied petroleum gas (LPG) business operator has to pay annually about Tk 1.35 crore in total to 13 regulatory bodies to obtain licenses or to renew them for business.

The licensing bodies along with their fees are Bangladesh Energy Regulatory Commission (Berc) Tk 3,565,000, Bangladesh Petroleum Corporation (BPC) (proposed) Tk 2,500,000, Bangladesh Investment Development Authority (BIDA) Tk 40,000, Department of Environment (DoE)Tk 205,000, Bangladesh Standards & Testing Institution (BSTI) Tk 1,204,158, Department of Explosives Tk 116,000, Bangladesh Fire Service & Civil Defense (BFSCD)120,000, Bangladesh Inland Water Transport Authority (BIWTA) Tk 2,500,000, and City Corporation/Local Government body Tk 93,760.

The other bodies and their fees include Department of Inspection of Factories & Establishment (DIFE) Tk 320,000, Office of the Chief Controller of Imports & Exports (CCI&E) Tk 61,000, Dhaka Chamber of Commerce & Industry (DCCI) Tk 10,350 and Registrar of Joint Stock Companies & Firms (RJSC&F) Tk 2,760,000 (assuming an authorized capital Tk.300 crore).

During the public hearing recently held by the Bangladesh Energy Regulatory Commission (BERC), officials of large six private LPG companies also raised the issues and demanded a single regulatory authority to monitor their business and introduction of a one stop service (OSS) at the prime regulator’s office.

Hasin Pervez, a leader of the Bangladesh CNG Filling Stations and Conversion Workshop Owners Association, brought a similar allegation saying that they have to pay fees to 22 bodies to take licenses for LPG and CNG business.

“The most bothersome part in this case is that there is no serial to maintain in seeking licenses or permission from among the bodies like deputy commissioner (DC) office, BPC, or any other authority,” he said adding that once anybody applies to DC office, its officials asked the applicant to take licenses from other agencies first and then apply.

He noted that when applications are filed to other authorities, they direct to bring the DC Office’s permission first and then apply to them.

Supporting the allegation, advisor of Consumers Association of Bangladesh (CAB) Prof Shamsul Alam said the consumer rights body would also prefer a single regulator in the energy sector.

“We’re of the same opinion that multiple regulatory bodies only create complications in business and enhance cost which ultimately impacts on the energy tariff and finally consumers have to pay the price,” he said.    

Echoing their views, former member of the BERC Mizanur Rahman said there should be single and prime regulatory authority with one stop service facilities which will coordinate with other government agencies.

He said BERC already simplified some of the processes in applying for a license for energy business by reducing the number of required obligatory documents.

“But still there is scope for doing much more to further ease doing business in the energy sector,” he told UNB. 

He also suggested fixing the fees in a rational way so that it would not impact the consumers.