Energy Bangla

The technical evaluation committee of the Bangladesh Energy Regulatory Commission (BERC) gave the opinion that there is no reason to raise the retail gas tariff by Karnaphuli Gas Distribution Company Limited (KGDCL), as the company is already making profit. It, however, has recommended a 2.49 percent hike in retail gas tariff by Bakhrabad Gas Distribution Company Limited (BGDCL) as its operating revenue makes a shortfall of Tk 381.27 million compared to recommended revenue. The KGDCL, in its proposal, said the ongoing development activities would be hampered and marketing of LNG would also be affected if the BERC does not consider tariff hike. Responding to the Consumer Association of Bangladesh (CAB), the company representative admitted that they earned profit of Tk 570 crore last fiscal and its officials and employees enjoyed profit bonus of Tk 2.75 lakh in an average during the year. BERC Chairman AR Khan then asked the KGDCL to submit an appropriate proposal along with supporting papers on asset transfer from Bakhrabad, system gain, gas supply to Karnaphuli Fertilizer Company Limited (KAFCO) and other financial statements. ‘BERC would not consider KGDCL’s proposal if they fail to submit those,’ he said. Opposing the proposals of hiking gas tariff, Prof M Shamsul Alam, Energy Adviser of the CAB said most of the proposals of the distribution companies are improper and incorrect in terms of BERC act. The distribution companies proposed raising of CNG prices without adjustment of petroleum fuel tariff, he said. ‘The government had earlier hiked CNG tariff several times considering fuel tariff hike then’but it’s really unfortunate the government is yet to adjust oil prices,’ he said expressing frustration. He again raised his voice against offloading of shares of the gas distribution companies in the stock market. He requested the BERC to instruct the distribution companies to expand foreign direct investment they receive for utilisation of development activities instead of enjoying it as Workers’ Profit Participation Fund (WPPF). Prof Nurul Islam advised the BERC to create a fund through introduction of bulk gas tariff for state-owned BAPEX through enactment of a law. The BERC committee, in a recommendation, said the KGDCL would require revenue worth Tk 14,498.57 million to reach the break-even point considering proposed Tk 0.13 wheeling tariff hike and another Tk 0.8830 assets value during this fiscal. The current operating revenue of KGDCL is Tk 18,271.47 million, which is Tk 3,772.90 million more than the expenditure, the BERC committee said. So the company would not require to raise gas tariff, it said. Tk 0.35 per cubic meter as distribution charge is enough to run the KGDCL but it earns revenue of Tk 0.96 at present, the committee said. KGDCL has got net profit of Tk 3,121.48 million in last fiscal year while it received net profit of Tk 3,884.23 million, Tk 4,055.93 million and 2,993.53 million in the fiscal years 2012-13, 2011-12, 2010-11 respectively. Besides, the BERC committee, in a recommendation, said the BGDCL would require revenue worth Tk 17,189.62 million to reach the break-even point considering proposed Tk 0.13 wheeling tariff hike and another Tk 0.8830 assets value during this fiscal. The current operating revenue of BGDCL is Tk 16,808.34 million, which is Tk 381.27 million lower than the cost required to run the company comfortably, the BERC committee said. The BGDCL would require to raise gas by 2.49 percent, the committee said. Even incurred loss by the company, its official enjoyed Tk 1.33 lakh profit bonus last year, BGFCL official said. BERC Chairman AR Khan chaired the hearing where BERC members Dr Salim Mahmud, Delwar Hossain, Rahman Morud, Md Maqsudul Hoque, KGDCL Managing Director Ayub Khan Chowdhury, BGDCL Managing Director Mohammed Rafiqur Rahman and consumers’ right activities were present.