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Regulator weighing pleas for doubling gas price

Synchronising its tariffs with expensive foreign LNG imports likely motive

April 01, 2018 00:00:00

FE Report

State energy regulator now weighs the proposals submitted by the gas- distribution companies for nearly doubling its tariffs, with an obvious motive of adjusting the prices with that of expensive LNG.

As planned, the hike in gas tariffs will be applicable to all consumers save households.

"We shall invite public hearing over the tariff-hike proposals after holding a commission meeting soon," said a senior official of the Bangladesh Energy Regulatory Commission (BERC).

The Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMER) is seeking a verdict from the BERC before the first LNG imports land in the country.

But the BERC official said the tariff-hike decision might not come before two months time as certain procedures must be followed before the commission's all-clear.

The government expects to commission the maiden supply of re-gasified liquefied natural gas or LNG on April 25 and start the marketing of the fuel on May 1.

The distribution companies in their unified proposals sought the average natural gas tariffs raised to Tk 12.95 per cubic metre (cm) from the existing rate of Tk 7.39 per cm.

Tariff for gas-fired power plants sought to be raised to Tk 10 per cm from Tk 3.16, for fertiliser factories to Tk 12.80 per cm from Tk 2.17.

The pump price of compressed natural gas (CNG) in the filling stations has been sought to be hiked to Tk 48 per cm from the existing Tk 40.

For industrial sector natural gas tariff as sought by the distributors is Tk 15 per cm in place of Tk 7.76.

For gas-fired captive power plants the tariff is sought to be Tk 16 per cm in a rise from Tk 9.62.

Tea-garden owners have to pay Tk 12.80 per cm in a raise from Tk 7.42.

State-run Petrobangla has already sent proposals separately to its large natural gas consumers like state-run Bangladesh Power Development Board (BPDB) and Bangladesh Chemical Industries Corporation (BCIC) over the possible tariff hike.

The petroleum agency has estimated that the government would require US$844.20 million (Tk 69.22 billion) in one year to import a total of around 1,000 million cubic feet per day (mmcfd) equivalent of LNG and its re-gasification in two under-construction FSRUs (floating storage and re-gasification unit).

It would require $600 million more to import around 600mmcfd natural gas in a year through three proposed small-scale FSRUs to be built at offshore Sangu platform and adjacent to already-built jetties on the river Karnaphuli owned by state-owned Chittagong Urea Fertilizer Company Ltd (CUFL) and multinational joint-venture Karnaphuli Fertilizer Company Ltd (Kafco), a senior Petrobangla official said.

The BERC raised the natural gas tariffs latest by 22.70 per cent for all types of consumers with effect from March 1 and June 1 respectively.

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