Consumers fear gas price hike to send living costs soaring

After doubling the price of gas since 2015, the government is likely to raise the price again to adjust import costs of liquefied natural gas or LNG, according to officials concerned.

Households and energy experts fear a further increase in gas price will seriously affect the overall costs of living and may create chaos in the sector.

“I am not ready to bear additional expenses for the gas price hike as the cost of living has already doubled due to previous increases in prices of gas and electricity. Life will really be harder for us,” said Shahnaz Begum, a housewife in the city’s Badda area, as she heard of the proposal to raise the gas price.

Head of a nine-member family, Shahidul Islam expressed his apprehensions about likely increase in other utility prices.

“The gas price increase may not be a big problem. But a more serious problem is the gas price hike affects prices of other commodities and services,” Shahidul, a private firm employee, told this reporter at the Farmgate bus stop.

Once the proposed prices come into effect, users of single burners may have to pay Tk 1,000 each instead of Tk 750 and those using double burners will have to pay Tk 1,050 instead of Tk 800, official sources said.

Prior to submitting the gas price hike proposal to the Bangladesh Energy Regulatory Commission, former energy secretary Nazimuddin Chowdhury told Prothom Alo recently that there is no alternative to raising the price of gas.

He said the current production cost of a unit of gas is above Tk 9 and the cost will rise to almost Tk 14 per unit once imports of LNG begin.

Asked about the matter on Wednesday, Abu Hena Md Rahmatul Munim, secretary, energy and mineral division, who assumed the office recently, said, “I don’t know much about it at this stage.”

Neither could he tell this reporter when the proposed gas prices would be made effective.

An official at the ministry, seeking anonymity, however, said the LNG inclusion is being delayed due to a technical glitch at the delivery terminal in Karnaphuli river.

Also, the price of CNG (compressed natural gas) is projected to be double as the price of a cubic metre of CNG may be raised to Tk 51.70 from the Tk 32, according to government officials.

Commercial consumers, they said, will likely have to pay Tk 35, instead of Tk 17.04 for per cubic metre CNG.

Inclusion of LNG into energy supply is being widely blamed for the proposed price hike of gas.

A professor of chemical engineering department of Bangladesh University of Engineering and Technology (BUET), Ijaz Hossain, said imports of LNG and its supply will immediately affect both industries and prices of their products.

“Those, for instance, who spend no more than Tk 5 per cent for energy on production will be on the safer side, but energy-intensive industries like ceramics and fertiliser which have to spend Tk 20-30 per cent of their total production cost will definitely be in trouble,” the energy expert pointed out.

The government has already imported 500 million cubic feet LNG, which is waiting in the sea to be supplied to the national grid.

Terming management of the sector a major challenge in such a situation, Ijaz Hossain said, “If we fail to manage it, it will create chaos and that will have a huge impact on our economy.”

“It will also drain more money out of the country, raising the exchange rate against US dollars,” he added.

About the proposed gas price hike due to the LNG import, former energy adviser M Tamim earlier said, “The supply of gas from internal sources to the national grid will gradually decline due to the import of LNG. And the LNG price hike in the international market will seriously affect the country’s economy.”

Shahjahan Mia, a driver of the CNG-run auto-rickshaw on Gulshan-Badda link road questioned:  “Who will pay double for the same distance? If the gas prices increase further, I’ll have to leave this occupation.”

His office-going passenger said it has now been a rule that the prices must be hiked every coming year. “The irony is that our salaries do not increase with the rise in utility tariffs,” he added.

In 2017, Bangladesh Energy Regulatory Commission announced increase of prices of gas for all users by an average of 22.7 per cent.

Accordingly, the rate of the gas tariff has been raised to Tk 750 from Tk 600 for every single burner and to Tk 800 from Tk 650 for double burners on 1 March last year.

The gas price at the household level has been doubled since 2015.

At present, a user of a single burner has to pay Tk 750 while a double burner Tk 800 which was Tk 400 and Tk 450 in 2015 respectively.