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Don't submit inflated bids for gas price hike

BERC chief tells cos as hearing ends

FE Report | March 15, 2019 00:00:00

The Bangladesh Energy Regulatory Commission (BERC) Chairman Monowar Islam was 'irked' on Thursday over the inflated natural gas tariff hike proposals, as submitted by the state-run companies in the public hearing.

"You should submit proposals with as much hike as required, not exaggerating those," he suggested to the top officials of gas companies at the concluding session of the four-day public hearing.

The BERC chairman presided over the hearing at the TCB auditorium at Karwan Bazar in the city, where other members of the energy watchdog were present.

Mr Islam acknowledged presence of corruption in the energy sector, saying, "There are some dishonest people in this sector, who should come out of it (corruption)."

He, however, assured the consumers of taking decision over the tariff hike issue 'judiciously.'

Pointing to the previous tariff hikes, he said in 2009, the gas companies had sought a hike of 65 per cent on an average, but the BERC raised the tariff by 11 per cent.

In 2015, the companies had sought to hike tariff by 40.79 per cent, whereas the commission hiked it by 26 per cent.

In 2017, the gas companies had sought a hike of 95 per cent, but the BERC raised the tariff by 11 per cent.

In 2018, they had sought 75 per cent hike, while the BERC did not raise tariff at the consumer end, he also said.

In 2019, the gas companies sought to hike tariff by around 103 per cent on an average.

Meanwhile, consumer rights groups, businessmen and left-leaning political organisations protested the tariff hike proposals of the state-owned Karnaphuli Gas Distribution Company Ltd (KGDCL) and the Pashchimanchal Gas Distribution Company Ltd (PGDCL).

They demanded to remove all sorts of corruption, theft and gas pilferage to ensure efficient operation of the gas companies.

They also demanded scrapping of the special law, under which power and energy sector projects are being awarded bypassing tender.

They also challenged the legitimacy of raising natural gas prices as well within a year of price hike.

The BERC has no legal ground for hearing the gas price hike proposals within one year of increase, they pointed out.

It is "unlawful" to hold such a public hearing in the fiscal year 2018-19, when the commission issued its order on October 16, 2018, they added.

The BERC, in its latest verdict on October 16, 2018, had increased margin rate and transmission charge of different gas companies, keeping the fuel price for retail consumers unchanged.

The rights groups protested the Petrobangla's proposal, saying hiking gas tariff before the arrival of liquefied natural gas (LNG) in April is not "legitimate."

They were also critical of Petrobangla's cost of importing LNG. If neighbouring India can import LNG at a cost of around US$6.0 per thousand cubic feet, why Petrobangla would have to pay around $10 for the same, they argued.

The Energy and Mineral Resources Division (EMRD) Joint Secretary Jahir Raihan said the gas companies are not 'non-profit organisations'.

But attaining profit is not their target as well, he opined.

Communist Party of Bangladesh (CPB) leader Ruhin Hossain Prince said the leftist parties would go for mass movement against the gas price hike.

All the state-run gas marketing and distribution companies submitted identical proposals in the hearing to raise tariff.

They proposed raising gas tariff for household consumers by 80 percent, and up to 211 percent for consumers of different sectors, including power, industry, and motor vehicles.

According to their proposals, a consumer having a single-burner stove would have to pay Tk 1,350 per month instead of the existing rate of Tk 750, while a two-burner stove user would have to pay Tk 1,440 per month instead of Tk 800.

The metered household consumers would have to pay Tk 16.41 per cubic metre (one unit) instead of Tk 9.10.

The companies also sought that the power plants would pay Tk 9.74 for per unit of gas instead of the existing rate of Tk 3.16, accounting a 208 per cent hike.

Besides, the fertiliser factories would pay Tk 8.44 per unit instead of Tk 2.71 with a hike by 211 per cent.

For the captive power plants, they proposed to increase gas tariff by 96 per cent to Tk 18.88 per unit from Tk 9.62.

Both the state-run gas marketing and distribution companies proposed to hike gas tariff by 132 per cent for the industries to Tk 18.04 per unit against the existing rate of Tk 7.76 per unit.

They proposed to raise tariff by 50 per cent for the CNG stations to Tk 48 per unit from Tk 32, and proposed to raise 41 per cent tariff for commercial use of gas to Tk 24.05 from Tk 17.04 per unit.


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