Gas price hike soon

The Bangladesh Energy Regulatory Commission (BERC) is set to hike gas tariff for all categories of consumers. According to the new rate, gas price for two burners is Tk 1000, and for single-burner stove Tk 800 in residential sector. The price of Compressed Natural Gas (CNG) for vehicles could see a hike up to Tk 40 per cubic metre. The current tariff for double burners is Tk 650 and for single burner Tk 600, and it is Tk 32 per cubic metre for CNG driven vehicles. 

Most of the sectors -- such as power production, fertiliser factory, commercial, industrial, tea garden etc-- will face the gas price hike.

Md Maksudul Haque, acting chairman of BERC, said the gas price hike will be declared any day soon. The main reasons behind the hike are the government’s decision to collect tax and VAT from this sector to subsidise the increased salary of government service holders.

The energy adviser to Consumers Association of Bangladesh (CAB) Dr S M Shamsul Alam said, according to a government decision back in 1998, 55 percent revenue (40 percent tariff and 15 percent VAT) earned from gas sector will not be received by the government, rather will be used for operating the sector. But the recent decision of collecting money for government employees from gas sector is a clear violation of the previous decision.

He also said the extra money, required to pay the increased salary of the government service holders, can be collected from the surplus money left idle with the gas companies, since they are not using the surplus money for any development programmes.

On one hand, the government decided to hike gas price, and, on the other hand, it has not taken any adequate action to lessen gas scarcity in the country. With the arrival of the winter, gas crisis is hitting even harder. The concerned officials of Titas Gas Company said they are trying their level best to solve the problem.

However, the proposed hike is lesser than the rate suggested earlier by the Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) and other organisations operating under it, says the BERC sources.

According to the BERC sources, Petrobangla first suggested increasing the price upto 90 percent, but it was decreased to 65 percent after public hearing. Therefore it was proposed that residential consumers will have to pay Tk 1200 for double burners, 1100 for single burner, the price was proposed Tk 12.53 instead of Tk 7 per cubic metre for the domestic connections with gas metres, almost 32 percent increase was suggested for power production sector, about 36 percent for fertiliser sector, 127.27 percent for captive power sector, around 56 percent rise for industrial sector, 67 percent for commercial areas, 68 percent for tea gardens, and 48.15 percent for CNG stations.

Previously gas price was hiked in 2015 when tariff for two burners was increased to Tk 650 from Tk 450, and Tk 600 from Tk 400 for single burner. In 2009, the price was hiked in all sectors.

Reliable BERC sources said a public hearing will take place in February or March next. The Power Development Board (PDB) already proposed a power price hike to BERC.

This can also be mentioned, Dhaka Wasa increased water price within four months of its previous hike this year, amidst scarcity of supply water in the city and suburbs.

The tariff was raised by Tk 1.51 per unit (1000 lt.) for domestic use and 3.72 for commercial areas.

The article originally published in Prothom Alo print edition is written in English by Sitesh Kumar Saha.