Gas price hike all-time high

The government on Sunday increased gas price for all users on average by 32.8 percent which is an all-time high, putting consumers under an additional burden of Tk8,620 crore per annum.

The increased price rate will be effective from Monday (July 1).

Over the past one decade, the companies asked for raising natural gas tariff for four times at the consumers’ end, but the Bangladesh Energy Regulatory Commission (BERC) increased thrice, according to the BERC data.

The move has come in a bid to mitigate the deficit caused by expensive Liquefied Natural Gas (LNG) imports, says the new tariff order. 

According to the new tariff rate, consumers will have to pay monthly Tk925 for a single-burner stove while a double burner will cost Tk975, meaning additional Tk175 for cooking with gas. 

“The commission has fixed the new tariff, taking into account costs of local production, LNG import, transmission and distribution, and also the country’s socio-economic condition,” said BERC Chairman Monowar Islam while briefing media in the capital’s Karwan Bazar on Sunday afternoon.

Due to defective pipelines, the government currently can supply only around 650mmcf LNG per day against its capacity of 1000mmcf a day.

But in the new tariff, the regulatory commission has mentioned the figure at 850mmcf per day. The cost of per cubic blended (local and LNG) gas is Tk12.60, while the existing retail price to end users is Tk7.38 per cubic metre. 

“To meet the high cost of imported LNG, the government needed 75 percent hike in gas prices. But we raised only 32.8 percent, considering the economic condition of low-income people,” Monowar Islam said. 

“We also withdrew the existing minimum charge from metred domestic consumers, industry, captive power, commercial and tea estate, for which distribution companies will suffer a loss of Tk538 crore,” he added. 

On the other hand, the regulatory commission has imposed Tk0.10 in demand charge per cubic metre gas against all consumers except for domestic gas users. In this way, distribution companies will earn additional Tk350 crore. 

In the new tariff, price of gas generated from power plants has increased to Tk4.45 per unit, instead of the existing Tk3.16, meaning a 40.82 percent hike.

Besides, the fertiliser factories will pay Tk4.45 per unit instead of Tk2.71 with a hike by 64.21 percent.

For the captive power plants, the BERC has increased gas tariff by 43.97 percent to Tk13.85 per unit from Tk9.62.

The commission has hiked the gas tariff by 37.89 percent for the industries to Tk10.70 per unit against the existing rate of Tk7.76 per unit.

However, the BERC has increased tariff by 7.50 percent for the CNG stations to Tk43 per unit from Tk40 while it hiked 34.98 percent for commercial use of gas to Tk23 from Tk17.04 per unit.