The Bangladesh Power Development Board (BPDB) has proposed increasing the wholesale electricity tariff by 1.20 taka to 1.50 taka per unit.
Currently, the wholesale electricity price stands at Tk 7.04 per unit, while the average production cost reached Tk 13.19 per unit in the last fiscal year. As a result, BPDB is incurring a loss of Tk 5.47 per unit. This has created an annual deficit of nearly Tk 60,000 crore, which is being covered through government subsidies.
At the same time, Power Grid Bangladesh PLC has also proposed increasing electricity transmission charges. The state-owned transmission company currently charges 30 paisa per unit and has proposed raising it to 49 paisa.
The proposals were presented during a public hearing organized by the Bangladesh Energy Regulatory Commission (BERC) on electricity tariff adjustments.
The hearing was held on Wednesday at the Institution of Agriculturists Bangladesh auditorium in the capital. Political leaders, business representatives, consumer rights organizations, and other stakeholders strongly opposed the proposed price hike.
According to BPDB’s proposal, despite the current wholesale tariff of Tk 7.04 per unit, the average production cost rose to Tk 13.19 per unit in the previous fiscal year, resulting in a loss of Tk 5.47 per unit. This has created an annual shortfall of around Tk 60,000 crore, which the government is managing through subsidies.
BPDB stated that the depreciation of the taka against the US dollar, rising fuel prices, and increasing import costs have further widened the losses. Due to the ongoing conflict in the Middle East, the deficit may rise to Tk 63,000 crore in the current fiscal year.
BPDB Chairman Engineer Md. Rezaul Karim said that even if the proposed tariff increase is approved, subsidies will not be fully eliminated. However, the government’s subsidy burden could be reduced by 20 to 25 percent.
According to BERC’s technical evaluation committee, wholesale electricity prices would need to increase by nearly 77 percent to completely eliminate subsidies.
BPDB purchases electricity from various power plants and sells it to distribution companies at wholesale rates. Those companies then supply electricity to end consumers. Therefore, an increase in wholesale tariffs will eventually raise retail electricity prices as well.
Power Grid Bangladesh PLC, which is responsible for electricity transmission, currently charges 30 paisa per unit and has proposed increasing it to 49 paisa.
Managing Director Abdur Rashid Khan said that despite significant investments to expand power transmission capacity, electricity transmission has not increased at the expected rate. In addition, rising dollar exchange rates and loan repayment pressures have pushed the company into losses for the past three years. The company’s current debt stands at around Tk 56,000 crore.
However, BERC’s technical committee suggested that the transmission charge could be set somewhat lower than the proposed rate, at around 44 paisa per unit.
Speaking at the hearing, Dr. Syed Mizanur Rahman, Organizing Secretary of the Consumers Association of Bangladesh (CAB), said the burden of corruption and mismanagement in the power sector was being shifted onto the public. He alleged that BERC was siding with “illegal proposal-makers” instead of protecting consumers’ interests.
Ruhin Hossain Prince, former General Secretary of the Communist Party of Bangladesh, said that every hearing is ultimately followed by a price hike, turning the process into a mere formality. He warned that higher electricity prices would increase industrial production costs and severely affect the economy.
Jalaluddin, a leader of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said exports are already declining, and higher electricity prices would place enormous pressure on the industrial sector.
BERC Chairman Jalal Ahmed said that opinions from all stakeholders had been collected and the commission would make its decision on electricity tariff adjustments based on technical evaluations.
Anyone may submit written opinions on the proposal until May 23.