Originally posted in The Business Standard on 23 March 2022
Stakeholders at the third-day hearing on gas price hike called for checking system loss to overcome supply crunch-led production disruption at industries
The technical committee of the Bangladesh Energy Regulatory Commission (BERC) has recommended a 20% hike in gas price in Dhaka, Mymensingh, Cumilla and Chandpur, and the gas distribution price to be zero.
The committee came up with the recommendation Wednesday as state-owned gas distributors Titas and Bakhrabad – who cover the above four districts – proposed around 172% and 38% hikes in distribution charges, plus 117% hike in gas price.
According to the proposed prices of the distributor, a double burner at household level would cost Tk2,100 from the current Tk975. But the technical committee has recommended the price to be at Tk1,080.
Meanwhile, stakeholders at the third-day hearing on gas price hike called for checking system loss to overcome supply crunch-led production disruption at industries.
The technical committee found that the earning of Titas Gas Transmission and Distribution Company Ltd – the largest gas distributor of the country – will stand at Tk10,147crore in the current fiscal year against its revenue target Tk8,322 crore. In other words, Titas will have additional Tk1,825 crore in the balance at the end of the current fiscal year.
Similarly, Bakhrabad’s earning will be around Tk1,910 crore against the revenue target of Tk1,817 crore, keeping aside Tk93 crore in profit.
Therefore, the technical committee recommended the regulatory commission to cancel the existing Tk0.25 per cubic metre distribution charge for the both companies.
The regulatory commission Chairman Abdul Jalil presided over the hearing while its members Maqbul-e- Elahi Chowdhury, Balur Rahman and Mohammad Abu Farooq were also present.
Check corruption, system loss
Golam Sarwar, a member of the Bangladesh Ceramic Manufacturers and Exporters Association, told the hearing that they spend around 10%-12% of their operational cost for gas.
“We have high tech Garman machinery and trained engineers. But we cannot do anything when the low gas pressure hurts our production,” he said.
The ceramic manufacturer said low gas pressure during the peak-hours spoils around 80% of the production.
He requested the distributors to check corruption and minimise the system loss instead of rushing for hiking prices frequently.
Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association, said Petrobangla took Tk550 crore in the form of dividend in the last three years for holding 75% share of Titas.
“Even after that, it [Petrobangla] came here to increase the gas price so that it can make more money. This is unfair,” he said.
“Petrobangla makes profit by selling gas and taking dividends. But its role was supposed to ensure the fair distribution of the national resource rather than only making profit,” Khokon said.
“In the private sector, we don’t take any dividend as a sponsor when the company is in bad shape. But Petrobangal is making profit even in the volatile energy market.”
“Now, the government should decide whether it will save the economy or allow Petrobangla to make further gains,” he said.
If the state-owned companies become too business-oriented, then the private sector does not have much options left but to shutter the businesses, Khokon added.