Govt wants to take control for hiking gas-electricity prices as they wish: M Tamim  

M TamimProthom Alo file photo

According to Bangladesh Energy Regulatory Commission (BERC) Act, electricity and gas prices in the country are fixed through public hearings.

By amending the act, the government wants to take control of price fixing decision into their own hands.

The cabinet has already approved the amendment. Former energy-related special assistant to the chief advisor of the caretaker government M Tamim spoke to Prothom Alo on this issue.

Q :

BERC fixes the electricity and gas prices through public hearing. Now the BERC Act is being amended to increase prices directly on an executive order. How do you view this?

All the governments in every country of the world have a tendency of breaking their own laws. Global reforms in the power sector began In 1996.

Among these reforms there was the formation of a regulatory body. The job of the regulatory body is to ensure transparency and accountability in government’s work.

In fact, the BERC Act was enacted in 2003 under heavy pressure from International Monetary Fund (IMF), World Bank and Asian Development Bank (ADB).

It came into effect during the former caretaker government. But what’s going on now is clear indication of moving backwards. This will result in the increase of inefficiency and reduction of accountability.

Q :

IMF had put pressure on forming BERC. Now the issue of IMF's condition about subsidy-reduction is being discussed. Does this have anything to do with the law being amended?

It can be said with 100 per cent certainty that the government taking over the power to set prices is not on IMF’s terms. In fact, IMF didn’t suggest stopping the subsidy either.

They know that subsidies on fuel are now increasing all over the world because of high prices. They suggested to keep the subsidy at a reasonable level.

There’s no connection between subsidy reduction and curbing the powers of the commission.

Q :

Then why did the act need to be amended? During the last public hearing, various questions were raised about the irregularities and inefficiency of the power sector. If the prices are increased without hearing, these won’t come forward anymore.

BPC is the intransparent organisation of the energy sector; they do not make clear any information. In fact, international organisations are also aware of BPC’s condition.

Earlier, IMF had talked about involving international agencies to review BPC’s accounts. But the government and BPC did not agree to that.

Issues of irregularities and inefficiency of various companies in the power and energy sector come to light through public hearings because of BERC being there.

Sometimes, these companies lie and try to increase prices providing suspicious information. During the public hearings, different parties including consumers get an opportunity to raise questions about these.

Q :

Even if the companies propose higher amount when it comes to hiking the price, BERC evaluates that. This never allows the price to be increased as proposed; this opportunity will no longer be available there.

BERC never increases the price according to the proposal. In the past, BERC have hiked the price by 20 per cent despite there being a proposal to increase the electricity price by 66 per cent at the wholesale level.

Even if the proposal suggested increasing gas price by 117 per cent, BERC increased it by about 23 per cent. Apart from this, BERC includes various conditions while increasing the prices.

It also advises those organisations become cost effective and efficient. Plus, it directs them covering up revenue deficit by reducing system loss. The monitoring powers BERC has in this sector will no longer be there after the law has been amended.

Q :

The government is saying that BERC takes a long time to hike the prices. The law is being amended to reduce this time under special circumstances. How logical is that?

In defence of the law amendment, issues of it taking up about 90 days to hike the price and subsidies have been brought to the forefront. Both these tasks can be done through BERC though.

The 90-day issue isn’t mentioned in the law. Rather it has been stated in the BERC regulations. If desired, the time period can be reduced by revising it.

The process BERC follows for price adjustment can be finished within a month. Even automatic price adjustments are possible too. BERC has been adjusting Liquefied Petroleum Gas (LPG) prices every month.

BERC can also follow India or other country’s formula for automatic price adjustment. Electricity and gas prices do not go up abruptly anywhere, it’s done through hearings.

Avoiding BERC will increase government's responsibilities. Earlier, the government could put the liability of price hike on BERC.

It’s not that BERC can do much going beyond the government’s decisions. However, BERC has gained some kind of credibility for everyone's participation being ensured through the hearings.

The 90-day argument is unacceptable. In actuality, the government wants to take control of the power just to increase the price as they like.

Q :

The government itself adjusts the fuel price. What will be BERC’s job if the government adjusts electricity and gas prices as well? And what will determine the special circumstances?

It’s true that the commission has many other functions. In fact, they may not even be able to finish all the tasks for the lack of manpower. They also provide license to the public-private institutions of power and energy sector. Their main task however is to decide the prices.

The government is saying that the power is not being taken away entirely. The government will fix the price only under special circumstances. But, BERC’s power is being undermined with this. There’s no specific definition of special circumstances.

Whichever situation the government labels as a special circumstance will turn into one. There is no way to confirm whether it’s actually a special circumstance or not. This will allow the government to raise prices whenever it desires.