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BERC raises gas prices from today

LNG import behind 'biggest-ever' hike


FE Report | July 01, 2019 00:00:00


The gas consumers will have to count an additional 32.8 per cent higher tariff on an average from the first day of the fiscal year (FY), 2019-20, as the energy regulator has announced the 'biggest-ever' hike with effect from today (July 01).

The new weighted average natural gas tariff will be Tk 9.80 per cubic metre from the existing Tk 7.38.

The Bangladesh Energy Regulatory Commission (BERC) Chairman Monwar Islam announced the tariff hike decision at a press conference in the commission's office at Karwan Bazar in the city on Sunday.

Household consumers having single-burner will have to pay Tk 925 per month instead of the existing Tk 750, while the double-burner users will have to pay Tk 975 instead of the existing Tk 800 following the hike.

New gas tariff for metered household consumers will be Tk 12.60 per cubic metre from the existing Tk 9.10.

Import of expensive LNG (liquefied natural gas) was the prime reason behind this hike, the BERC chairman said.

"The country's gas sector is passing through a critical period. The hike is announced to ensure smooth supply of natural gas to consumers."

"We should consider the cost of energy with the cost of no energy," he added.

The BERC has increased the tariff, considering an inflow of around 850 million cubic feet per day (mmcfd) of re-gasified LNG (RLNG) to the national gas grid. The current level of RLNG consumption is hovering around 600 mmcfd.

According to the commission's calculation, some 75 per cent hike to Tk 12.60 per cubic metre, was required to arrange an additional fund to the tune of around Tk 180 billion, especially to foot the LNG import bills in the next FY.

With this hike, some Tk 86.20 billion can be collected from the gas consumers, said the BERC member Md Mizanur Rahman.

Around Tk 24.20 billion will come from the Energy Security Fund (ESF), and the government will require to provide subsidy worth Tk 76.90 billion to meet the deficit, he added.

Fertiliser factories will count the highest hike in tariff by 64.20 per cent to Tk 4.45 per cubic metre from the existing Tk 2.71, following the latest hike.

New tariff for compressed natural gas (CNG) in retail level will be Tk 43 per cubic metre from the existing Tk 40, witnessing the minimum hike of 7.5 per cent.

Natural gas tariff for small and cottage industries under commercial sector will remain unchanged at Tk 17.04 per cubic metre.

Captive power plants will count a tariff hike of 43.97 per cent to Tk 13.85 per cubic metre from the existing Tk 9.62.

Natural gas tariff for power plants has been hiked by 40.82 per cent to Tk 4.45 per cubic metre from the existing Tk 3.16.

For industrial consumers, the new gas tariff will be Tk 10.70 per cubic metre from the existing Tk 7.76, following a hike of 37.88 per cent.

The BERC raised natural gas tariff for hotels and restaurants under commercial consumers segment by 34.97 per cent to Tk 23.0 per cubic metre from the existing Tk 17.04.

For tea estates, new tariff will be Tk 10.70 per cubic metre from the existing Tk 7.42, with a hike of 44.20 per cent.

In January, the state-run Petrobangla and its allied gas marketing and distribution companies proposed raising gas tariff for household consumers by 80 per cent, and for consumers of different sectors, including power, industry, and commercial clients, by up to 211 per cent.

The BERC had previously hiked natural gas tariff for the consumers by 22.70 per cent on an average in March 2017.

In September 2015, the commission had hiked the average gas tariff by 26.29 per cent. Previously, the tariff was hiked by 11.22 per cent in 2009.

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