The Bangladesh Chemical Industries Corporation (BCIC) has expressed concern that increasing gas prices for fertilizer production before finalizing the subsidy could lead to a fertilizer crisis.
Petrobangla (Bangladesh Oil, Gas and Mineral Corporation) has proposed increasing the gas price for fertilizer production from Tk 16 to Tk 40 per unit. The Bangladesh Energy Regulatory Commission (BERC) held a public hearing on this proposal on Monday.
At the hearing held at the BIAM auditorium in Dhaka, most participants opposed the price hike, arguing that raising the gas price for fertilizer production would increase agricultural production costs. The Consumers Association of Bangladesh (CAB) boycotted the hearing, accusing BERC of taking consumer-unfriendly decisions.
BERC Chairman Jalal Ahmed said that if the gas price for fertilizer production rises, agricultural costs will also increase. “We must consider food security and employment issues,” he said, adding that LNG import costs also need to be taken into account. “The commission will verify the validity of all arguments before issuing a final order.”
He noted that the final decision on gas prices would be made after considering the proposal, the technical evaluation committee’s report, and opinions expressed by stakeholders during the hearing.
According to Petrobangla’s proposal, the price hike would allow the import of an additional seven LNG cargoes to ensure adequate gas supply for fertilizer production. From October to March, 250 million cubic feet of gas would be supplied daily, while from April to May, 165 million; in June, 175 million; and from July to September, 130 million cubic feet per day. On October 3, fertilizer plants received 92 million cubic feet of gas supply.
BCIC Director (Planning and Implementation) Delwar Hossain said that with full gas supply, over 2 million tons of fertilizer could be produced. “If the gas price is set at Tk 30 and 2 million tons are produced, the production cost per kilogram would be around Tk 46,” he said. “Currently, imported fertilizer costs about Tk 61 per kg.”
In the 2024–25 fiscal year, due to gas shortages, Jamuna Fertilizer Company was closed for 361 days, Chattogram Urea Fertilizer Company for 273 days, and Ghorashal Fertilizer Company for 198 days. Ashuganj Fertilizer and Chemical Company operated for only 3.75% of the time.
BCIC stated that the country needs to supply 3 to 3.2 million tons of urea annually. Due to gas shortages, 1.6 to 2.1 million tons have to be imported each year. Prolonged shutdowns of fertilizer plants have caused technical issues in cooling towers and electrical systems, increasing operational costs.
The Ministry of Agriculture suggested that the Ministry of Finance should also provide its opinion on this issue.
Currently, the average production cost of urea fertilizer is Tk 38 per kg. BCIC sells it to dealers at Tk 25 per kg, who then sell it at Tk 27 per kg. The government provides a subsidy of Tk 13 per kg. If gas prices increase, this subsidy will decrease.
BERC stated that any written opinions or objections regarding the proposed gas price adjustment can be submitted to the commission by October 13.