Hiking gas price step by step

Mohammad Ashraf Hossain The Financial Express reported on July 04 that the Indian Cabinet Committee on Economic Affairs of India had approved raising natural gas price from April 2014 to an average of prevailing rates at international benchmarks and cost of imported LNG into India. The price in April is likely to be $8 per million British thermal unit as against $4 currently. We know that fuel gas is the most significant natural resource of Bangladesh. But its pricing has been made very complex and irrational, flouting the pricing norms that are followed worldwide. In case of all commodities and services, a fixed pricing is followed for a fixed time, but fuel gas pricing does not follow that norm. For example, rates of fuel gas used in vehicle (CNG), fertiliser factory, power generation, captive power, industry, household and commercial ventures are different. The rate for CNG is the highest, followed by domestic, industry, captive power, power generation, and fertiliser production use. Interestingly, households have two rates, one on the basis of number of burners installed and the other on the basis of consumption of gas per cubic metre. From the media reports, it is known that the government plans to increase gas prices of all categories. A proposal in this regard has been under active consideration of the Bangladesh Energy Regulatory Commission (BERC). Like other commodities, the fuel price should have a single price rate at the consumer level. A move by the authorities to re-fix it now will trigger resentment among different consumers. As different price tags have been prevailing here for decades, these need to be streamlined step by step. At a first step, the prevailing highest rate may be kept fixed and all other prices may be increased to the next higher rate. In this way after every six months, another step may be taken. When all the prices will be the same, the authorities can then consider the price of per cubic metre of fuel gas as equivalent to half the price of one litre of imported octane. It is considered that a conventional vehicle can cover the same distance by consuming one litre of octane or one cubic metre of fuel gas as a thumb rule. As fuel gas is one of Nature's gifts in Bangladesh, people deserve price concession. But to provide justice to the liquid fuel consumers, equivalent fuel gas price should not be less than half of the imported liquid fuel. Only wholesale price should be different from consumer price and should be allowed to exploration companies and distribution entities. The local and overseas exploration companies of fuel gas need to get equal price. Currently, local gas companies are getting Tk 25, but the overseas explorers are getting Tk 220 or more for the same unit of fuel gas. After certain interval, maybe in every six months, the local fuel gas explorers' gas price is to be increased to equal that of foreign companies. mah120cb@yahoo.com