Media reports revealed that Petrobangla has submitted a proposal to the Bangladesh Energy Regulating Commission (BERC) to increase fuel gas price. Nine different rates have been proposed. These according to the reports are: every thousand cubic feet gas for house hold has been proposed to Tk 235, captive power Tk 240, CNG Tk 1132, industry Tk 220, commercial Tk 350, fertilizer Tk 80, power Tk 84, tea garden Tk 200 and for single burner Tk 850 per month while for double burner Tk 1000 per month. That is single price for a particular commodity principal denied again like previous times.
The government is reported to have making effort to import LNG (Liquefied natural gas) to reduce gap between gas demand and supply. In international market, price of LNG is around $15 per unit. The international oil companies working in Bangladesh charge $3.0 plus per unit of fuel gas whereas the local gas explorers get Tk 25 for the same unit of gas. In average, per unit cost of gas is around $2.0 plus now to Petrobangla. When LNG import will start, if government tries to provide gas to consumer at break-even price, Petrobangla has to increase price substantially. Alternatively, huge subsidy is to be paid by the government that is not considered prudent.
The government should increase price of local gas explorers at equal to the foreign oil companies performing in Bangladesh. Simultaneously government needs to follow uniform single price of gas for all consumers in the country. To make the consumer habituated with the international price, government has to increase price of fuel gas gradually. For example, in every six month each category consumer prices of fuel gas could to be increased to next higher price. This way a single price of fuel gas could be established in the country.
The government has been providing subsidy at input stage as well as at product sale stage in different products. For instance, government is giving subsidy on diesel to produce power and giving subsidy at the time of power sale. When government would consider subsidy is necessary for a product or service, it has to be provided at end product/ service, not in intermediate stages.
Extremely high difference between gas and liquid fuel prices in the country is one of the major factors for concentration of industrial ventures in and around Dhaka and Chittagong. The government has to create environment to develop all the areas of the country. Increase of gas price will reduce cost difference between fuel gas and liquid petroleum fuel that will contribute to reduce cost competitiveness of industries performing in different geographic locations in Bangladesh where gas is supplied and where gas is not supplied.
Against this backdrop, BERC may be asked to approve a single price of fuel gas to all consumers gradually by increasing prices of existing different categories to the next higher price after every six months keeping the highest price static.
Mah120cb@yahoo.com