Power tariff hike urged amid increasing subsidies

The government should gradually increase power tariffs to ease mounting subsidy pressure on the country's economy amid the escalating Middle East crisis, leaders of the Bangladesh Independent Power Producers Association (BIPPA) said on Monday.

They said Bangladesh's electricity sector is at a precarious crossroads due to a combination of global fuel- price shocks, declining domestic gas production and mounting financial stress on independent power producers (IPPs).

The BIPPA leaders were speaking at a discussion on the 'Current Energy and Power Landscape of Bangladesh' at a city hotel, where the association's former president Imran Karim presented a keynote paper titled "Present Scenario of IPP Power Plants Towards a Sustainable Partnership."

BIPPA president KM Rezaul Hasanat and director Faisal Ahmed Chowdhury also spoke at the event.

The weighted average fuel prices in local currency terms rose by 91 per cent between 2019 and 2025, but electricity tariffs have not kept pace, Mr Karim said in his presentation.

Industrial customers faced tariff hikes of up to 111 per cent, while domestic and commercial users saw increases of only 54 per cent, he added.

With average generation costs now at Tk 12.95 per unit (kilowatt-hour), the gap between cost and recovery continues to widen.

Over the past several years, between 2018 and 2025, Bangladesh's total power generation grew at a compounded annual growth rate of 6.2 per cent.

The share of domestic gas in power generation has nearly halved, falling from about 64 per cent to 33 per cent.

With LNG import infrastructure capped at around 1,100 mmcfd, the country has become increasingly reliant on imports.

Azizjst@yahoo.com