PMO asks for submitting draft gas tariff by next week | 2018-04-24 |

LNG Import

PMO asks for submitting draft gas tariff by next week

Shamim Jahangir     24 April, 2018 12:00 AM printer

A high-powered committee is preparing recommendations for new gas tariff as the government will start supplying costly imported LNG from next month to mitigate the nagging gas crisis.

The Prime Minister’s Office (PMO) on Monday asked the committee to submit its draft recommendations within a week, a member of the committee told the daily sun after attending a meeting at the PMO.

The government is also keeping in mind the upcoming national election while preparing the draft on gas tariff adjustment, the member of the committee said on the condition of anonymity.

Finance division Additional secretary Arfin Ara Begum is leading the team for drafting the recommendations for the new gas tariff.

Prime minister’s power and energy adviser Dr Tawfiq-e-Elahi Chowdhury, energy and mineral resources division secretary Nazimuddin Chowdhury, power secretary Dr Ahmad Kaikaus and senior officials concerned attended the meeting.

Power Division also submitted a report to the PMO on the financial implications of a gas tariff hike.

“The government will provide us fund or we might go for power tariff adjustment based on the gas tariff hike,” an official concerned said.

Dr Tawfiq-e-Elahi Chowdhury earlier said the government will hike natural gas tariff for industrial use in phases. 

Last month, the gas distribution companies submitted a proposal for a staggering 160 percent hike on an average in gas tariff for non-household users including power plants, fertiliser units, CNG refuelling stations and industrial units.

An official said the gas tariff for power plants, fertiliser units and other consumer levels has proposed to be made almost double.

According to official sources, the gas distribution companies proposed to raise gas tariff for electricity generation by 216 percent to Tk 10 per cubic meter from Tk 3.16 only. Besides, the gas tariff for fertiliser factories has been proposed to be raised by 342.80 percent to Tk 12.80 per unit from existing Tk 2.71. 

The gas tariff for industries and CNG stations was proposed to be raised to Tk 16 from Tk 7.76 and to Tk 48 from Tk 40 per unit respectively.  Gas tariff for captive power generators has been proposed to be raised to Tk 16 from Tk 9.62 per unit, and for the tea gardens to Tk 12.80 from Tk 7.42 per unit.

LNG is currently selling at Tk 13.52 per cubic meter in the international market whereas locally produced natural gas costs Tk 7.35 per cubic meter.

The government will need around Tk 14,000-Tk 15,000 crore for importing 1000mmcfd of LNG in the current fiscal. The cost will be doubled after the government starts importing LNG import through Indian Reliance and Petronet from 2021.