Oil and gas prices are likely to go up

FE Team | Published: July 10, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The government may yet again increase prices of gas and oil to help reduce losses incurred by the state-owned gas and petroleum companies.
"There is no option but to raise the domestic gas prices," Energy and Power Adviser Tapan Chowdhury told the newsmen Monday.
On oil prices, he said the rising gasoline prices in the international market are threatening the financial viability of the state-owned Bangladesh Petroleum Corporation (BPC).
"The government is counting losses in gas marketing," he said, adding, "the price of crude petroleum was hovering around US$72 a barrel until Sunday and to meet the domestic demand the country imports 30,000 tonnes of fuel oils every month."
The government incurs losses over Tk 9.50 on per litre of diesel and Tk 9.0 on per litre of kerosene due to the rise in oil prices in the international market, he added.
Tapan, however, did not give any timeframe for raising the prices of gas and oil.
The Energy and Mineral Resources Division (EMRD) last week placed a proposal to the council of advisers to increase gas prices for all the local consumers.
Currently the parent gas company - Petrobangla - purchases gas at US$ 2.50 per unit (1,000 cubic feet) on an average from the IOCs and sells at $1.50 per unit resulting in a loss of $1.0 for per unit of gas, a senior EMRD official said.
Besides, oil prices in the international market were hovering around $58 a barrel when the government last raised the oil prices in the month of April, he added.
As per the EMRD proposal the government is set to raise gas prices for domestic use by 25 to 36 per cent, for bulk consumers by around 10 per cent and for compressed natural gas (CNG) by around 77 per cent.
Gas prices for a single-burner would be at Tk 475 instead of the existing Tk 350 a month and for a double-burner at Tk 500 from the existing Tk 400 for the domestic consumers, according to the EMRD recommendations.
The gas prices for bulk consumers like power plants, fertiliser factories, captive power plants, industry, tea-estate, and commercial would go up by 10 per cent.
Per cubic metre gas prices for power plants, fertiliser factories, captive power plants, industry, tea-estate, and commercial consumers are now at Tk 2.61, Tk 2.24, Tk 3.73, Tk 5.23, Tk 5.23 and Tk 8.23 respectively.
The energy division recommended that the price of CNG would be increased by around 77 per cent from Tk 8.50 per CM to Tk 15 per CM.
The previous government in January 2005 increased the gas prices for domestic and bulk consumers.
The CNG price was last increased in July 2004.