Gas tariff to keep raising in next 5 yrs

Experts say lower prices is needed for industrial expansion

Shamim Jahangir

20 June, 2021 12:00 AM printer

The government is planning to increase tariff of natural gas during the next five years.

A high official said such increase is being considered to keep abreast of changes in international tariff of Liquefied Natural Gas (LNG).

“We have already suffered a lot due to tariff hike of LNG and petroleum fuel prices in global market,” said Md Anisur Rahman, Senior Secretary at Energy and Mineral Resources Division.

EMRD has raised the issue to the Bangladesh Energy Regulatory Commission (BERC), he said.

“We have no other alternative to increasing tariff to ensure smooth supply of natural gas in the days ahead,” Rahman told this correspondent.

He said, “Most of the consumers may suffer dearth of gas supply due to fund crunch.”

Senior secretary said the government has increased supply of natural gas in the national grid by around 100 mmcfd during COVID-19 pandemic.

He added that new gas field has been found in Zakiganj of Sylhet, from where the BAPEX can supply additional gas.

“Our capacity for onshore gas exploration is quite satisfactory, but for offshore gas exploration, we still encourage foreign explorers,” Md Anisur Rahman said.

He, however, declined to comment about when the next tariff hike will be proposed by the gas distribution companies.

The Energy Division disclosed the plan to raise gas tariff further when industrial units suffered due to the pandemic. Some industrial units have already requested to consider payment of monthly gas bills in instalments as they suffer fund crunch, according to official sources.

However, at a virtual meeting, Md Maqbul-E-Elahi Chowdhury, BERC Member (gas) said the government would strengthen the BAPEX for exploration of new gas.

“Currently, we have a supply of 3300 million cubic feet gas per day, out of which, 74 percent comes from local sources and 26 percent are imported LNG,” the official said.

“By 2025, the ratio local gas and LNG will stand at 45 percent and 55 percent. And by 2030, the ratio will reach 16.5 percent and 83.5 percent, which means, the gas supply will mostly depend on LNG imports in next 10 years,” he said.

 Professor Dr M Shamsul Alam, Energy Adviser to Consumers Association of Bangladesh (CAB), at the same meeting, suggested reducing natural gas tariff.  “For the industrialisation, we have to ensure supply of natural gas to industries at a lower cost,” he said.   

He said the regulatory body raised natural gas tariff by 32.8 per on an average in the fiscal year 2019-20.

Now, the weighted average of natural gas tariff is Tk 9.80 per cubic metre.

Household consumers having single-burner are required to pay Tk 925 per month now, while the double-burner users pay Tk 975.

But the regulator said the import of expensive LNG was the key reason behind the hike.