Electricity for bulk-power consumers is getting costlier, with its multiplier impact, as the government is set to raise its tariff rates by tomorrow (Thursday) amid countrywide nagging outages.
Bangladesh Energy Regulatory Commission (BERC) will announce the new bulk-power tariffs to newsmen Thursday, a senior BERC official told the FE Tuesday.
The official couldn't tell the extent of rise to be announced during verdict on 'public hearings' held in the run-up.
Sources say any increase in bulk-electricity tariffs means state-run electricity-distribution companies will have to purchase electricity at higher rates from the BPDB, the lone buyer of electricity from producers.
The distribution companies like Dhaka Electric Supply Company Ltd (DESCO), Dhaka Power Distribution Company Ltd (DPDC), Rural Electrification Board (REB), and West Zone Power Distribution Company Ltd (WZPDC) might also seek to hike retail-level electricity tariffs as a consequence, they foretell about its cascading effects in the downstream.
The state-run Bangladesh Power Development Board or BPDB sought around a 66-percent hike in bulk tariffs on grounds of BERC having raised natural-gas tariffs and hikes in oil prices on the international market.
The BERC hiked gas tariffs by 22.78 per cent on average with effect from June 2022 following public hearings.
The new weighted average gas tariff is now Tk 11.91 per cubic metre in a rise from previous Tk 9.70.
The government had raised oil prices by up to 52 per cent on August 5 and following widespread opposition it later cut the price of diesel, kerosene, octane and petrol by Tk 5 per liter on August 30.
Bangladesh's apex trade body and rights groups, however, had opposed the power tariff-hike proposal of the BPDB and demanded keeping the current prices unchanged at this hour of dearth.
The Consumers Association of Bangladesh (CAB) demanded import of all sorts of petroleum products by the state-run Bangladesh Petroleum Corporation (BPC) discontinuing oil-import permission to private sector as a cost-cutting measure.
The BPDB sought to hike bulk tariffs to Tk 8.58 per unit (1 kilowatt-hour) from Tk 5.17 per unit in the event of unavailability of subsidy from the government.
Subsidized energy supply happens to have become order of the day worldwide--especially in the western countries now in chokehold by supply blockade by Russia as a countermeasure against sanctions over the Ukraine war--in the wake of a global crunch.
The BPDB in its proposal to the BERC argued that it would have a deficit of around Tk 302.51 billion in 2022 if the bulk-electricity tariffs were not hiked, stating that its electricity-purchase cost of around 88.99 billion units of electricity would soar to around Tk 741.89 billion and sale price would be around Tk 439.37 billion.
It claims that the imposition of import duties and tax on furnace oil since June 2020 has increased tax-related costs for electricity generation by around 34 per cent.
The imposition of 5.0-percent VAT on coal and soaring prices of coal on the international market have increased electricity-generation costs in coal-fired power plants, the BPDB stated in its proposal.
Per-unit (1-kilowatt-hour) energy cost to generate electricity soared by 48.35 per cent to Tk 3.16 in fiscal year (FY) 2020-2021 from Tk 2.13 unit of FY'20, the country's lone buyer of electricity from power producers - BPDB - argued.
Electricity-generation costs per unit might escalate further to around Tk 4.48 per unit in FY '22 with soaring global oil, coal and LNG prices, it fears.
Country's achieving cent-percent electrification increased electricity-generation costs by Tk 0.05 per unit as the number of low-cost electricity consumers soared as a consequence, the BPDB argues.
Meanwhile, despite several ongoing austerity measures like cutting public office timings by one hour a day, shutting educational institutions two days a week and shops and shopping malls by 8pm, countrywide load-shedding went amass.
Power-distribution companies are failing to maintain any load-shedding schedule, which was in place around a month back. And the state minister finally gives up hopes for easing through September-October, as assured after the recent nationwide collapse, and now takes a long view.
Azizjst@yahoo.com