Thanks to high import cost of liquefied natural gas (LNG), government is all set to hike gas prices next week.
However, residential and commercial consumers will be spared from paying higher prices. The upward price revision will affect industrial consumers, power plants, fertilizer factories, captive power plants, and CNG refueling stations, officials concerned informed, reports UNB.
Bangladesh Energy Regulatory Commission (BERC) sources hinted at a price hike of up to 40 percent.
The move comes at a time when government started supplying high-cost imported LNG in national gas network to supplement to locally produced gas since August this year. Per unit (thousand cubic feet or mcf) LNG costs USD 11 as against locally produced gas price of only USD 2.9 per unit.
Official sources in Bangladesh Energy Regulatory Commission (BERC) said that after examining all the pros and cons of the gas price hike proposals placed by different government entities, the regulatory body is now fully prepared to announce its decision anytime.
BERC Member Mizanur Rahman said they were waiting for two things to settle – firstly, flow of imported LNG through pipeline and implementation of a government decision of giving supplementary duty (SD) waiver on imported LNG.
He said BERC is expecting a government order on SD waiver in a day or two.
Earlier in June the energy sector’s watchdog body held series of public hearings responding to the appeals of the state-owned different gas distribution and transmission companies.
All the 8 state-owned downstream entities in gas sector including six distribution companies, one transmission and an LNG marketing company, had appealed to the BERC seeking an average 75 percent hike on the existing gas prices for different consumer groups except the household and commercial ones.
The distribution companies are Titas Gas Transmission & Distribution Company Limited (Tatas Gas T&D), Bakhrabad Gas Distribution Company Limited (BGDCL), Jalalabad Gas Transmission and Distribution System Limited, Pashchimanchal Gas Company Limited, Karnaphuli Gas Distribution Company Limited and Sundarbans Gas Company Limited (SGCL).
While participating in the hearing, the gas entities argued that as per the government decision they had to submit their respective price hike proposals because of the high import cost of LNG as it will push up their cost substantially.
The largest gas distribution company Titas in its proposal sought to raise the gas price by 206 percent for power plants, to Tk10 per cubic meter (CM) from Tk3.16.
The highest raise of 372 percent was proposed for gas price for fertilizer factories to Tk 12.80 per CM from the existing rate of Tk 2.71 per CM.
The captive power plants’ gas price was proposed to be Tk 16 per CM against Tk 9.62 while price of gas provided to the industries was proposed at Tk 15 per CM against the existing Tk 7.76 per CM and CNG gas price was proposed to be Tk 40 per CM against existing rate of Tk 32.
Different consumer right groups including Consumers Association of Bangladesh (CAB) opposed the proposals and appealed for reducing the gas prices.
per the BERC Act, the regulator is supposed to announce its decision within 90 days from the completion of the hearing.
They said the downstream companies had been asked to move their appeals to the energy regulator to bring rationality in their price by accommodating the cost of imported LNG.
The Petrobangla started imported LNG supply to national gas network from August 18 through re-gasification by private sector-operated floating storage and re-gasification unit (FSRU).
Officials said currently 300 mmcfd gas is being supplied from LNG and it will go up to 500 mmcfd in a month or two and then 1000 mmcfd gas will be flowed from next year as per a government plan.