PetroBangla, 7 other distributors push for gas price hike for second time in a week

For the second time in a week state-owned distributors on Tuesday reiterated their proposals to the energy regulator to push for a 117 per cent hike in gas price at retail level, officials said.

Separately, their principal gas supplier, PetroBangla, has also placed its proposal to raise the price of the natural gas at bulk level, reports news agency UNB.

Earlier, on 21 January, Bangladesh Energy Regulatory Commission (BERC) rejected a similar proposal from the six state-owned distributors and one transmission company on grounds of technical errors.

But it was not immediately known how much the PetroBangla proposed to raise the gas price at the bulk level.

If the BERC accepts the distributors’ proposals the monthly gas price for a double burner will increase to Tk 2,100 from existing Tk 975, while price for single burner will rise to Tk 2,000 from current Tk 925.

“We’ve received proposals from all the eight entities including PetroBangla by Tuesday”, said Abdul Jalil, chairman of BERC to the news agency.

He, however, informed that the PetroBangla proposal still lacks some of the required documents which it will place in a day or two.

Of the eight entities, PetroBangla is the bulk supplier to the six downstream distribution companies. They are -- Titas Gas Transmission and Distribution Company Ltd. (Titas Gas), Bakhrabad Gas Distribution Company Limited (BGDCL), Jalalabad Gas Transmission and Distribution System Ltd. (JGTDSL), Paschimanchal Gas company Limited (PGCL), Karnaphuli Gas Distribution Company Limited (KGDCL) and Sundarban Gas Company Limited (SGCL) while the only transmission company is Gas Transmission Company Limited (GTCL).

About the latest move by the gas companies, the BERC chairman said that after receiving the remaining documents from PetroBangla, the commission will sit in a meeting to scrutinise their documents and judge the primary merits of the proposals.

“If all the required documents are found to be valid and acceptable, then the commission will form a technical committee to scrutinise in detail the proposals and finally their proposals, including the findings of the technical committee, will be placed for a public hearing”, he said.

Official sources said the PetroBangla and its seven subsidiary bodies submitted the proposals to raise gas price at the bulk and retail levels following the directives of the energy and mineral resources division of the ministry of power, energy and mineral resources.

For last several months, the energy division has been under pressure from the finance ministry to collect more revenues by raising gas price to offset subsidies in the energy sector.

A member of the BERC said the PetroBangla currently imports only five per cent of its daily consumption from highly volatile international spot market where it has to buy gas at higher price.

It imports its 20 per cent gas from two international companies under long-term contracts where price is static.

“If the local production is raised by five per cent, then the country will not need to import the five per cent gas from volatile market at higher price and finally it would not have to raise the gas price at retail level”, he added.

Normally, PetroBangla supplies 2,700-3,000, million cubic feet (mmcfd) gas per day of which 2,300 mmcfd is produced locally while 600 mmcfd is imported as liquefied natural gas LNG.

Of this imported 600 mmcfd, 150 mmcfd is imported from spot market at a variable price between $10 and $30 per unit.