Consumers and experts on Thursday censured a move of state-run Petrobangla to realise Tk 10,400 crore a year through a fresh round of gas price hike to adjust its deficit amounting Tk 900 crore.
The plan was revealed at a public hearing hosted by the Bangladesh Energy Regulatory Commission on the proposal of state-run Petrobangla to increase the retail price of natural gas by 65 per cent on an average.
Petrobangla, the state-run Oil, Gas and Mineral Resources Corporation, bears the operation and maintenance cost of its subsidiaries in oil and gas exploration, production, transmission and distribution from the revenue earned by the distribution utilities in gas bills from the consumers.
It also buys gas from the International Oil Companies in Bangladesh.
Petrobangla demanded the hike to offset its deficit created due to a recent compulsion to supplementary duty and value added tax on the gas it buys from the IOCs.
Petrobangla will need to pay Tk 900 crore to the National Board of revenue in SD and VAT for the IOC gas in the current fiscal year.
Every year, the gas consumers would have to pay Tk 10,400 crore in addition to the current payment if the demand of Petrobangla comes to effect, said Consumer Association of Bangladesh energy adviser M Shamsul Alam.
Of the additional money to be realised in bills from the consumers, only Tk 900 crore would be used to offset the loss created from the purchase of IOC gas.
NBR will again realise Tk 6,032 crore in SD, VAT and advance income tax while the rest of the money will be deposited to the accounts of the state-run companies involved in gas exploration, production, transmission and distribution.
During the cross-examination, Petrobangla director finance Md Towhid Hasanat Khan said that the corporation had no other way but to comply with the government practices in paying duties and taxes and other margins from the revenue earned in gas bills from the consumers.
Angry consumer representatives said in the hearing that it was a kind of extortion of public money.
Energy expert Nurul Islam told the energy commission that the problem lies on the pricing formula of natural gas which should be revised to a simple form.
Between August 7 and 15, the energy commission held public hearing on the proposals of seven subsidiaries of Petrobangla in gas transmission and distribution to raise their operational margins as wells to increase the retail prices of gas.
The gas utilities demanded the retail hikes in gas prices to accommodate their required operational margins, increased
Except newly created Sundarban Gas Company Limited, an energy commission technical committee, however, showed that none of the companies would require hike in their margins as they were making huge profit from the transmission and distribution of natural gas.
During the hearing, the energy commission, experts and consumer representatives identifies many gray areas in administrative and financial activities of the companies.
The energy commission chairman AR Khan said that they would try to pass an order on the proposals of the gas utilities and Petrobangla on the basis of the series of hearing held until Thursday.