BERC panel to review proposal

A seven-member technical committee will review proposed gas-tariff hike to the height of LNG-import cost for new industries and expansions of the existing ones.
Bangladesh Energy Regulatory Commission (BERC) has constituted the panel for vetting the Petrobangla proposal that implies that these industrial subscribers would have to pay nearly double the current tariffs of natural gas.
"We have constituted the 7-member committee immediate after receiving the gas-tariff-hike proposal from state-run Petrobangla for raising gas tariff," BERC chairman Jalal Ahmed told the FE Wednesday.
He said the energy regulator would arrange public hearing inviting stakeholders over the gas-tariff hike on completion of technical committee's review and recommendation, likely in one month.
Sources have said Petrobangla has recently submitted tariff-hike proposal to the BERC under which new industries might have to pay tariffs on a par with the import price of liquefied natural gas (LNG).
As proposed by the corporation, owners of all new industries and captive power plants must pay natural-gas tariffs as per the total LNG import costs for getting new piped-gas connections.
It means, according to market insiders, unlike the ongoing fixed tariff rates, the tariffs for new industries would be variable as per the price movements of LNG on the volatile international market in addition to applicable VAT and AIT.
New industries and captive plants, which already have attained commitments or demand notes from companies for raising gas loads, must pay 50 per cent, or half the new gas commitments, at current rates. The remaining half would be paid in accordance with the LNG- import prices, spells out the tariff-hike proposal.
Besides, the owners of existing industries and plants must pay tariffs as per import prices for utilising additional gas above their existing approved loads.
To calculate import prices for fixing tariffs, state-run gas-marketing and- distribution companies will calculate three months' average prices of overall LNG import costs from long-term LNG suppliers and spot LNG suppliers.
Currently, all industries--big, medium, small, and cottage alike--are paying gas tariffs at Tk 30 per cubic metre, while the price of gas supplied to captive plants is Tk 31.50 for the same.
Under the current market price, the imported LNG per cubic metre is around Tk75.72 per cubic metre.
According to Petrobangla, it incurred loss of Tk 249.81 billion in FY2022 for having to fix LNG-selling price lower than the import cost.
After raising tariffs, its loss came down to Tk 42.87 billion in FY2023.
Until November 2024, the corporation had unpaid invoices against eight LNG cargoes and two floating storage and regasification units (FSRUs) totalling $266.70 million or Tk 32.80 billion.
Moreover, it owed some Tk 12.31 billion to the International Islamic Trade Finance Corporation (ITFC) on account of loan installments.
Sources said industry owners fret over an 'unofficial' embargo on new natural-gas connections to industries in a bid to ease owes of the already-starving gas-guzzling consumers across Bangladesh.
Although there is no official instruction either from the EMRD or Petrobangla to cease new industrial gas connections, gas marketers and distributors are not providing such connections for long, according to market sources.
"Officially, there is no ban on providing new gas connections to industries," says a senior Petrobangla official. "But the boards (of state gas-marketing and distribution companies) are not allowing new connections."
He adds: "We'll seek the EMRD's decision on the issue soon."
Sources have said rampant illegal gas connections across the country during the previous authoritarian Awami League government over the past 16 years have led to the cessation of new gas supplies.
A strong syndicate led by the deposed government's high-ups, local public representatives, top officials of gas-marketing and distribution companies and contractors surreptitiously gave scores of illegal connections by depriving new industries.
Later in day, Commerce Adviser SK Bashir Uddin said the interim government would discuss the matter with entrepreneurs before finalising the proposed hike in gas prices.
"Though raising prices is not pleasant, it has to be done. The Bangladesh Energy Regulatory Commission will make the adjustments after discussing it with entrepreneurs," he said.
He deplored that there had been economic exploitation during the previous Awami League government.
"According to the white paper, an estimated Tk 28 trillion has been siphoned off, and the burden will have to be borne by every citizen. Otherwise, the economy will plunge into further crisis," Uddin said at the inauguration of the Garment Technology Bangladesh (GTB 25) tradeshow and the Garment Accessories and Packaging Expo (GAPEXPO 2025) at the International Convention City, Bashundhara, in the capital.
The event has been jointly organised by ASK Trade and Exhibitions Pvt Ltd and Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA).
Some 500 exhibitors from 25 countries, including India, China, Japan, South Korea, and Germany, are displaying their latest technology and innovation used in production at the four-day concurrent shows.
At the inaugural event, responding to business owners' dissatisfaction with the proposed gas-price hikes, the commerce adviser explained the increase had not been planned in the same way as the previous government.
Highlighting the opportunity for investments in the renewable-energy sector, he called on entrepreneurs to use such energy, terming it the cheapest option, and reduce the dependence on gas.
Addressing the function, Bangladesh Textile Mills Association President Showkat Aziz Russell said doubling gas prices without prior consultation with businesses could force many factories to shut down.
"If the hike is implemented without proper discussions, how is the interim government different from the previous Awami League administration?" he posed the question.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) President Mohammad Hatem described the proposed gas-price hike as excessive and unjustified.
He questioned why gas prices would be increased to Tk 70-75, saying that such a major decision requires extensive consultations with stakeholders.
"The absence of engagement in this regard is unacceptable," he said. He further said the proposal would create uneven competition between new and old industries as well as erode their competitiveness on the international market.
Hatem noted that the previous government had halted export incentives, which encouraged importing yarn and fabrics by harming the local textile industry. He also called for a five-year deferment of the expected least-developed country (LDC) graduation of Bangladesh in 2026.
Former Bangladesh Garment Manufacturers and Exporters Association president Anwar-Ul-Alam Chowdhury Parvez said some 37 per cent of the educated population is unemployed and the issue cannot be resolved without focusing on the manufacturing sector.
Citing high bank-loan interest and rising fuel costs, he expressed doubts as to whether the government truly wants a thriving manufacturing sector.
Speaking as a special guest, Korean Ambassador in Bangladesh Park Young-sik said Bangladesh is globally recognised as a key hub for the garment industry, thanks to its strong manufacturing capabilities and rich ecosystem.
"Korea has consistently invested in Bangladesh and is committed to continuing this partnership in the future," he told his business audience.
President of BGAPMEA Md Shahriar said the garment accessories and packaging sector fetches $7.0 billion through deemed exports and $1.5 billion via direct exports annually on average.

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