Originally posted in The Business Standard on 22 March 2022
At the public hearing, the BERC’s technical committee suggests a 20% increase in the average gas price at the retail level
The technical evaluation committee (TEC) of the Bangladesh Energy Regulatory Commission (BERC) has recommended increasing the gas price to Tk11.64 per cubic metre from the existing Tk9.70, a 20% rise on an average.
As per the TEC’s price hike recommendation, the household gas price for the double burner stove will increase by Tk105 to Tk1,080 from the existing Tk975 if it is hiked.
The committee made the recommendation after analysing the proposals of Sundarban Gas Company Limited (SGCL) and Pashchimanchal Gas Company Limited (PGCL) to hike the average gas price by 117%.
During the second day’s public hearing of the BERC at BIAM auditorium in the city on Tuesday, the SGCL and PGCL officials sought to increase the gas price to Tk2100 for double burner and Tk2,000 for single burner stove from the existing price.
Of the total gas supply, SGFL and PGCL take only 3.52% and 4.47% gas respectively.
At the beginning of the hearing, BERC Chairman Abdul Jalil said, “The people are of first priority to us, without them we do not have existence. The social impact of the price rise should have remained in the price hike proposals. But the companies have avoided that.”
In the argument session on the proposals, Consumers Association of Bangladesh Vice-President Professor Shamsul Alam said neither distribution companies’ proposals, nor the recommendation of the BERC’s committee is acceptable because the proposals have been placed to accumulate the expenses of spot LNG -which is only 4-5% of the total supply.
Normally, the Petrobangla supplies gas of 2,700-3,000 million cubic feet per day (mmcfd) of which 2,300 mmcfd is produced locally while 600 mmcfd is imported as LNG. Of this imported 600 mmcfd LNG, 100 mmcfd to 150 mmcfd is imported from the spot market at a variable price between $10 and $30 per unit.
“If we reduce the gas theft and system loss which is around 8% of the total supply, we would not need to import spot LNG,” said Professor Shamsul Alam.
Therefore, he urged the regulator to keep the existing prices effective instead of hiking them.
Mohiuddin Ahmed, the convener of Bangladesh Sadharan Nagorik Samaj (BSNS), said all the companies that placed the tariff hike proposals run with profit. So, there is no logic of gas price hike based on these proposals.
Kamran T Rahman, senior vice president of Metropolitan Chamber of Commerce and Industries, said they are worried over the price hike initiative.
A fresh gas price hike will put the local businesses in a tough situation in the global competition, he said.
Among others, BERC members Maqbul-e- Elahi Chowdhury, Balur Rahman and Mohammad Abu Farooq were present at the hearing.