Consumers worried about frequent fuel oil, power price hikes

Nizam Ahmed Most of the industrial and domestic power consumers have said they have confidence in the authorities that they will be able to meet the electricity demand in the coming years. But they are worried about the frequent hikes in the prices of fuel-oil and electricity. Talking to the FE, entrepreneurs, traders, students and members of general public said recently that they were happy as the frequency and time of power load shedding had been significantly reduced over the past several months. However, they said frequent increases in fuel price and a planned hike of electricity tariff had aggravated their financial worries. They said as citizens of a democratic welfare country, people wanted adequate supply of utilities, mainly electricity, at an affordable price. "We had to keep factories out of production for up to six hours a day just two years ago, but now it has come down on an average to two hours," Shafiul Islam Mohiuddin, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told the FE. "It proves that the authorities are trying and working hard in accordance with their plan to provide electricity to all by 2021," said Mr Mohiuddin, the leader of the RMG sector, which earns more than 80 per cent of the country's total exports worth $23 billion a year. However, Mohiuddin said electricity and other fuels were becoming pricier hitting the poorer section of the people hard. Prices of petrol, octane, diesel, kerosene and fuel oil were raised by Tk 5.0 a litre to be sold at Tk 86, Tk 89, Tk 56, Tk 56, and Tk 55 a litre respectively by filling stations, effective from November 11. After raising the prices of imported petroleum products, which were hiked for the third time after May, the authorities are planning to raise prices of compressed natural gas (CNG) and electricity once again in the coming weeks, officials at the energy ministry said. Traders at shopping malls and kitchen markets said their businesses were running well when it comes to electricity. Moreover, they did not have to run oil-fired power generators frequently with the improvement of the power situation. "The power situation has improved, but I am worried as newspapers say that power tariff will be increased soon," Abdul Alim, manager of a colour studio on Topkhana Road said. However, students and members of the general public said it would have been better if the authorities had kept the prices of essentials stable. "The authorities need to supply essentials adequately and at the same time keep the prices within the reach of the masses," a university student said. A housewife said the power situation was better than in the past, but life was becoming very costly as prices of everything including food, fuel and CNG were high. Officials at Bangladesh Power Development Board said nearly 30 oil-fired peaking and rental plants had been set up in the public and private sectors over the last one and half years to add some 2,000 megawatt (mw) power to the national grid. Officials at the Bangladesh Petroleum Corporation (BPC), the sole importer and distributor of petroleum products and crude oil, said the state-owned enterprise was burdened with some Tk 60 billion in loan borrowed from state-owned commercial banks of the country as of October 2011. The recent hike in petroleum prices drew criticism from the main opposition party Bangladesh Nationalist Party (BNP), which is set to lead a countrywide campaign against the fuel-oil price hike. "There is no alternative (to raise price in order to lower subsidy), but at the same time the authorities should try to be more rational to keep prices at affordable level for the masses," Prof. Mustafizur Rahman, executive director of the Centre for Policy Dialogue (CPD) told the FE. The head of the leading think-tank suggested that the authorities should take up plans to reduce the cost of living for the general public through various welfare-oriented economic programmes. Other experts said the authorities were compelled to raise the petroleum prices to facilitate operation of the oil-fired power plants in their bid to generate adequate electricity. The annual demand for petroleum products rose to some 7.0 million tonnes presently against 4.0 million tonnes before oil-fired power plants were commissioned, BPC officials said. The demand for the petroleum products will also rise manifold as more oil-fired power plants are going to be set up by next two years. Toufiq-e-Elahi Chowdhury, adviser to the prime minister on energy affairs, said on Wednesday that there was no chance for the authorities to lower the prices of fuel in the next six month despite a falling trend of petroleum products in the world market. "The enhanced price will help the authorities to make up for the loss incurred in the form of subsidy in the recent months," he told reporters.