Bangladesh Energy regulatory Commission (BERC) is likely to announce a fresh gas price chart for all except domestic and commercial consumers. “The fresh price chart will be announced within a day or two, as the BERC has obligation to take a decision by this week as per set rules of BERC that said the commission shall give its verdict within 90 working days,” a senior official of BERC told on Saturday.
“The energy regulatory body held a public hearing on gas price in June 2018 and whatever be the observation and decision of the commission it will be announced by next week. Although, the increase will be nominal household and commercial consumers will be spared from the fresh price hike,” the official added. Replying to a question, Prime Minister Energy Adviser Dr Tawfiq-e-Elahi Chowdhury said “Our suggestion to the commission is to increase the price at a tolerable level.”
Since the government started importing LNG from last month it was estimated that Petrobangla needs US$2 billion to pay for LNG import every year. Presently, the government is using money from the Energy Security Fund to manage and plan for gas deficiency in the future. To address the nagging gas crisis, government plans to import LNG, they were facing difficulty to gather funding to meet import costs of 1,000 million cubic feet per day (mmcfd) of liquefied natural gas (LNG) and to operate two LNG terminals.
To pay the LNG bill for the current fiscal year, BERC has allocated approximately Tk 7,000 crore for one year to the Energy Division from its Energy Security Fund (ESF). “The price of LNG will be three times higher than the local gas. Petrobangla has started injecting LNG into the national grid from last month and is now supplying 200 to 300 mmcfd, which will stand at 500 mmcfd so we need a huge amount of money to pay the LNG bills,” a senior official of the Petrobangla told.
On September 2015, BERC created the ESF through a hike in gas prices for research work on developing the energy sector. As per the draft guidelines, for the sale of each cubic metre of gas, Tk1.01 is deposited in the special fund. The interest on the savings will also be kept in the fund along with the surcharge and profit on the fund money.
The Security Fund received around Tk 3,552.65 crore as of March 2017. The government is expecting the first consignment of 500 mmcfd (million cubic feet per day) LNG by May next year and another 500 mmcfd LNG is set to be imported by November 2018.
The latest rise in gas and power prices came on the back of sliding prices of energy on the global market and amid strong protests from the consumer rights activists and left-leaning political parties. In June this year, the BERC organised a series of public hearings after state-controlled power and gas marketing and distribution companies moved to have gas and electricity tariffs increased. Meanwhile, Power distribution companies had also proposed retail power hike between 21.31 and 22 per cent, while gas distributors had proposed a 40 per cent hike at the retail level.
The government is considering supplying local gas by blending it with LNG to keep the gas price at a tolerable level, he added. Earlier, Petrobangla Chairman Abul Mansur Md Faizullah said the current production cost of gas is about Tk 11 per unit against an average sales price of Tk 6.32. Petrobangla had to suffer a daily loss of Tk 9 crore