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Dhaka Friday,  Mar 29, 2024

Gas Price Confirmed Within 90 Days

EB Report

Bangladesh Energy Regulatory Commission (BERC) on Thursday slightly hinted on a possible hike in gas prices in both bulk and retail levels after the experts slammed a few state-run companies for their unjustified price hike proposals. However, the chairman to the BERC remarked that it would be confirmed within no more than 90 days from now on.

BERC has finished the eight-day long public hearing on Yesterday at the TCB Bhaban in Dhaka’s Karwan Bazar, in which Petrobangla and its related organizations took part. Masudul Haque, one of the commission member said that, the price of daily commodities are getting hiked every day, and considering this practical fact, gas price may hike. BERC chairman AR Khan admitted that he was not sure if the price would rise or fall. He assured that the price would be adjusted after a series of justified calculations and the decision would be made within the next 90 days.

Earlier, Petrobangla proposed a 65.45% hike and asked for an increase in bulk gas price from Tk. 6.29 to Tk. 10.29 per cubic metre on weighted average which means an additional revenue of around 8,000 crores Tk per annum for the Petrobangla. Petrobangla claimed that the newly fixed 55% SD and VAT are among one of the causes of the price hike proposal.

However, after evaluating the financial reports the Technical Evaluation Committee (TEC) and some energy experts found that the state-run company lacks only Tk 840 crores to buy gas from the IOCs (International Oil Companies).

Addressing the groundless price hike proposal of Petrobangla, the energy advisor to the Consumers Association of Bangladesh (CAB), Prof. Shamsul Alam said that, Petrobangla has no point to raise the price at such level. Their calculations are speculative as they have already an amount of Tk 2,700 crores as an FDR, which is solely public money and now asking to add burdens on the same public shoulders by raising the price. He urged to suspend the price hike initiative until the Energy and Mineral Resources Division settled the SD and VAT and FDR fund related issues.

Energy expert Prof Nurul Islam said the gas sector is passing through uncertainty since 2002. Moreover, the calculation of gas price fixing method is also wrong. Petrobangla should fix a proper method for calculating the gas price at the bulk level. Besides, he said first upstream gas price should be fixed then at the consumer level. He also suggested that the BERC should be given the power to fix the bulk gas price because BERC has been successfully fixing the price of gas and electricity since 2008.

Different consumer’s right groups, experts and trade bodies including Bangladesh CNG Filling Station & Conversion Workshop Owners Association strongly opposed the price hike proposal at the hearing.

Earlier, all the transmission and distribution companies under Petrobangla proposed to hike their respective gas tariffs and BERC arranged public hearings during the past few days for each of the companies. However, the TEC declined to hike the tariff of gas for most of the companies as the TEC observed that most of the companies were making profits, concluding that, they did not need to increase the prices.

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