Fresh gas tariff hike on cards

The government has moved for a fresh hike in gas tariff for all consumers as all state-owned gas marketing companies are now preparing to submit tariff hike proposals to the energy regulator separately, a top government official said.
"We will place the gas tariff hike proposal to the Bangladesh Energy Regulatory Commission (BERC) soon," Petrobangla Chairman Hussain Monsur told the FE Tuesday.
The gas marketing companies, which are the subsidiaries of state-owned Petrobangla, have been asked to submit tariff hike proposals separately to the BERC, he added.
The Petrobangla in March 2012 had submitted a proposal, on behalf of its subsidiary gas companies, to raise gas tariff by 34 per cent on an average for power plants, fertiliser factories, tea gardens, industries and compressed natural gas (CNG) filling stations.
Instead of raising gas tariff, the energy regulator had then asked the Petrobangla to ensure its subsidiary gas marketing companies to submit tariff hike proposals separately for consideration, BERC member Dr Selim Mahmud said.
But none of the country's six gas marketing companies -- Titas Gas Transmission and Distribution Company Ltd, Jalalabad Gas Transmission and Distribution System Ltd, Bakhrabad Gas Distribution Company Ltd, Paschimanchal Gas Company Ltd, Karnaphuli Gas Distribution Company Ltd and Sundarban Gas Company Ltd -- is yet to come up with tariff hike proposals separately, he said.
"We'll consider gas tariff hike only after getting separate tariff hike proposals from the gas marketing companies that are involved in selling natural gas to user ends," Mr Mahmud added.
A senior Petrobangla official said natural gas tariff hike is necessary to carry out oil and gas exploration and other necessary development works in the energy sector.
Natural gas is the cheapest among other energy resources in the country, he said.
The bulk consumers, especially industries and captive power plants, are misusing natural gas by installing inefficient machinery only due to cheap gas, said the official.
The Petrobangla in its proposal in 2012 had sought the tariff to be increased by 5.24 per cent to Tk 84 per unit (1,000 cubic metre) for power plants.
It sought to raise the tariff by 9.71 per cent to Tk 80 from Tk 72.92 for fertiliser factories and by 32.60 per cent to Tk 220 from Tk 165.91 for industrial users.
For privately-owned smaller power plants, known as captive power plants, the hike has been proposed by 102.94 per cent to Tk 240 from Tk 118.26.
The Petrobangla has proposed to raise gas tariff by 30.55 per cent to Tk 350 from Tk 268.09 for commercial consumers, by 20.55 per cent to Tk 200 from Tk 165.91 for tea estates and by 39.10 per cent to Tk 905.92 from Tk 651.29 for CNG gas refilling stations.
Earlier in a separate proposal in January, 2012, the Petrobangla had sought to raise gas prices for domestic consumers by up to 122 per cent. The proposal was dropped later following the Energy Ministry's intervention.
It had proposed doubling of retail gas prices to Tk 800 per month for domestic consumers with a single burner gas cooker and by 122 per cent to Tk 1,000 per month for those with a double.
The Petrobangla had not sought to raise the price of compressed natural gas (CNG) then, but the Energy Ministry recommended increase in the tariff for CNG, most of which is consumed by motor vehicles.
The Commission earlier raised gas tariffs, excluding CNG, for all types of domestic consumers by 11 per cent on August 1, 2009.
It last hiked the price of CNG by 20 per cent to Tk 30 per unit on September 20, 2011.
The country's overall natural production now hovers around 2,300 million cubic feet per day (mmcfd), against the demand for 2,700-3,000 mmcfd.
Gas shortages have pushed the Petrobangla to ration gas supplies in industries, power plants and fertiliser factories.