Originally posted in The Business Standard on 21 March 2022
A four-day public hearing on the proposed gas tariff hike of 117% at the retail level began on Monday.
Bangladesh Energy Regulatory Commission (BERC) is holding the hearing to listen to the arguments from the stakeholders in the gas sector.
All the sessions of the hearing – from 10am to 5pm every day till Thursday – will be held at the BIAM Auditorium in Dhaka till Thursday.
As per the gas distributors’ proposals submitted back in January, the monthly gas price for a double burner will increase to Tk2,100 from the existing Tk975, while the price for a single burner will rise to Tk2,000 from the current Tk925.
Hearing on the proposals made by state-owned Petrobangla and Gas Transmission Company Limited (GTCL) are being discussed today (21 March).
At the beginning of the hearing, BERC Chairman Md Abdul Jalil said that the regulatory body will not make any rash decisions in this regard.
Petrobangla proposed to hike gas prices to increase its revenue allocation for purchasing gas from public and international companies as well as import LNG from abroad.
Meanwhile, the proposals made by Sundarban Gas Company and Pashchimanchal Gas Company will be heard on Tuesday, Titas Gas and Bakhrabad Gas companies on Wednesday, and Jalalabad Gas and Karnaphuli Gas companies on Thursday.
After the conclusion of the hearing, the watchdog body will announce its decision within 90 days.
Official sources said Petrobangla and its seven subsidiary bodies submitted the proposals to raise gas prices at the bulk and retail levels following the directive of the Energy and Mineral Resources Division of the Ministry of Power, Energy and Mineral Resources.
For the last several months, the Energy Division has been under pressure from the finance ministry to collect more revenues by raising gas prices to offset subsidies in the energy sector.
A member of the BERC said Petrobangla currently imports only 5% of its daily consumption from a highly volatile international spot market where it has to buy gas at higher prices.
It imports its 20% gas from two international companies under long-term contracts where prices are static.
“If the local production is raised by 5%, then the country will not need to import the 5% gas from volatile markets at a higher price and finally it would not have to raise the gas price at the retail level,” he added.
Normally, the Petrobangla supplies 2,700-3,000 million cubic feet (mmcfd) gas per day of which 2,300mmcfd is produced locally while 600mmcfd is imported as LNG.
Of this imported 600mmcfd, 150mmcfd is imported from the spot market at a variable price between $10 and $30 per unit.