Energy regulator torpedoes gas price hike proposal

FE Team | Published: December 01, 2008 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The Bangladesh Energy Regulatory Commission (BERC) Sunday tagged a pre-condition prior to considering the proposal for raising gas tariff, ranging between 10 per cent and 15 per cent.
"The state-owned Petrobangla will have to create a 'gas development fund' and adopt a 'strategic plan' to augment gas supply with the extra income that it will earn in excess of the existing tariff," BERC chairman Golam Rahman said explaining the condition.
The newly created fund should be made tax-free and utilised for augmenting gas production across the country, he said while pronouncing the commission's order regarding the gas price hike.
The BERC chairman said the Petrobangla would have to give its consent regarding creation of the fund and adoption of the plan to the commission prior to making the new gas tariff hike effective.
"If Petrobangla submits its strategic plan for creation of the new fund today, the new hike would be effective from the following day," the commission chairman told the newsmen.
He said the new fund would be the national investment to ensure future energy security and keep the gas tariff at reasonable rate for the end- users.
The BERC, however, did not say anything about its planned new tariff for different sector-wise consumers like, industry, power generation and household Sunday.
The BERC also issued a number of instructions to Petrobangla and set different deadlines for their implementation to bring about transparency and accountability in its work.
The Petrobangla in June 2008 placed a proposal for enhancing the natural gas tariff by 65.92 per cent for the consumers arguing that it was incurring losses because of the mismatch between procurement costs and gas tariffs.
In its gas price hike proposal the Petrobangla proposed to increase the gas price to Tk 93.73 per MCF from existing Tk 73.91 per MCF for power plants owned by the Bangladesh Power Development Board (BPDB), Independent Power Producers (IPP) and small power plants (SPPs).
It proposed to fix gas tariff at Tk 93.73 per Mcf for fertiliser factories from the existing Tk 63.41 per MCF and Tk 182.25 per Mcf from existing Tk 105.59 for captive power plants.
The Petrobangla also proposed the gas tariff at Tk 182.25 per Mcf for industrial use from existing Tk 148.13 per Mcf, Tk 182.25 for tea-estates from Tk 148.13 per Mcf, Tk 291.59 per Mcf for commercial usage from existing Tk 233.12 per Mcf.
For domestic users the gas price has been proposed at Tk 550 for single burner from the existing rate of Tk 350 and Tk 600 for double burners from existing Tk 400.
"The proposal to hike the gas tariff by 65.92 has not been found justified and reasonable," the commission chairman said.
The commission Sunday ordered Petrobangla to prepare its statement of accounts calculating an average price of gas it purchases from different sources from July 1, 2009 next.
The Petrobangla must submit compliance report in this regard to the commission by May 1, 2009 next.