BERC rejects Titas tariff hike plea

The technical evaluation committee of Bangladesh Energy Regulatory Commission (BERC) Tuesday turned down a proposal for gas tariff hike put forward by state-run Titas Gas Transmission and Distribution Company Ltd (TGTDCL).
During a public hearing held at the ICB auditorium in the city, the committee, however, recommended a hike by 5.59 per cent for gas consumers of another state-run Pashchimanchol Gas Company Ltd (PGCL).
Rejecting the proposal made by TGTDCL for hiking the natural gas tariff, the BERC committee opined that profits of the gas marketing and distribution company would reach Tk 312.75 billion considering a hike in gas transmission charge by Tk 1.13 per cubic metre and newly fixed asset value of natural gas at Tk 25 per mcf (1,000 cubic feet).
The government did not follow an appropriate rule to fix the asset value of natural gas at Tk 25 per mcf, Energy Adviser of the Consumers' Association of Bangladesh (CAB) Dr M Shamsul Alam alleged.
He also accused state-run Petrobangla of using arbitrarily the Gas Development Fund (GDF) and lodging a complaint with the BERC.
Professor Alam also sought an injunction over realisation of GDF by Petrobangla until the dispute is resolved.
He accused TGTDCL of draining out the government revenue with the continuation of illegal gas connections and non-transparent and non- accountable accounting system.  
BERC Chairman AR Khan slammed the TGTDCL for not submitting the audited report of the firm to the Commission for the past three years.
"It is unfortunate that the TGDCL did not submit the audited report despite repeated instructions," he pointed out.
TGTDCL managing director Md Nowshad Islam acknowledged that illegal gas connections still goes on despite the government move to stop it. "We found some 235 kilometres (km) of illegal gas pipelines too," he said,   
TGTDCL has so far removed 185 kms of illegal pipelines, he added.
Professor Nurul Islam urged BERC to fix a bulk or wholesale price of natural gas before raising tariff further.
The Commission should not raise natural gas tariff on the basis of an apprehension about hike in costs of natural gas with the start of use of expensive liquefied natural gas (LNG), he said
The tariff could be raised when the LNG import starts, Professor Islam added.
Representative from Bangladesh Garment Manufacturers and Exporters Association urged the BERC not to raise natural gas tariff. "We have to spend 0.3 per cent of our total costs for natural gas," he added.
An owner of a steel mill Zahir Chowdhury urged the Commission to ensure a level playing field for the businessmen by fixing a rational tariff.
The captive power plant owners are getting undue benefits by generating low-cost electricity with low-cost natural gas from the government, he alleged.
Although the gas marketing and distribution companies submitted tariff hike proposals separately to the BERC, the proposed rates of hike were identical.
TGTDCL and PGCL had sought the highest hike of tariff for household consumers by 122 per cent, followed by captive power plants by 102 per cent.
They sought an increase in natural gas prices for domestic consumers, who use double-burner gas stoves, by 122.22 per cent to Tk 1,000 per month and by 112.50 per cent to Tk 800 per month for single burner.
For privately-owned smaller power plants, known as captive power plants, the proposal has been made with a tariff hike by 102.94 per cent per mcf to Tk 240 from Tk 118.26.
The tariff hike for power plants has been sought by 5.24 per mcf to Tk 84 per unit for power plants from Tk 79.82 per mcf.
They sought a rise in the tariff by 9.71 per cent to Tk 80 per mcf from Tk 72.92 per mcf for fertiliser factories and by 32.60 per cent to Tk 220 per mcf from Tk 165.91 per mcf for industrial users.
They also proposed a rise in the natural gas tariff by 30.55 per cent to Tk 350 per mcf from Tk 268.09 for commercial consumers, by 20.55 per cent to Tk 200 per mcf from Tk 165.91 for tea estates and by 39.10 per cent to Tk 905.92 per mcf from Tk 651.29 for feed gas of compressed natural gas (CNG) filling stations.
For retail consumers, they proposed an increase in price of CNG to Tk 40 from Tk 30 per cubic metre.
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