PDB proposes up to 21pc hike in wholesale power prices

The Bangladesh Power Development Board (PDB) has sent a proposal to the Bangladesh Energy Regulatory Commission (BERC) to increase wholesale electricity prices by 17 per cent to 21 per cent, reports bdnews24.com.
The move comes amid the US-Israel war on Iran, disrupting the energy supply chain, increasing its prices and leading to a volatile situation rarely seen.
According to a ministry document from April, the conflict has disrupted the supply of liquefied natural gas (LNG), furnace oil, and diesel, significantly driving up production costs.
The official document also refers to the International Monetary Fund (IMF) condition to reduce subsidies in the power sector by 2025 to access the remainder of a loan.
Confirming the receipt of the proposal, BERC Chairman Jalal Ahmed told bdnews24.com on Tuesday: "Now the technical committee will scrutinise it (the proposal)."
After the technical evaluation, the proposal is supposed to pass through a public hearing.
The chairman noted that they are yet to receive proposals on retail electricity price hikes from power distribution companies.
He added that a final decision is unlikely within the next month due to Eid-ul-Azha holidays.
The PDB has outlined three alternative scenarios for the wholesale tariff hike to mitigate its losses.
According to an official document, if current tariffs remain unchanged, PDB's potential deficit for the 2025-26 fiscal year could reach Tk 564.75 billion.
The three alternatives under consideration include increasing
the tariff by Tk 0.50 per unit, which would reduce the government's subsidy burden by Tk 52.44 billion.
A Tk 1 per unit increase would cut the subsidy requirement by Tk 104.89 billion. A Tk 1.20 per unit increase, on the other hand, would lower the subsidy requirement by Tk 125.86 billion.
The Ministry of Power, Energy, and Mineral Resources argued that without these adjustments, the subsidy pressure would become an unsustainable burden on the country's overall financial management.
While the wholesale hike is the primary focus, the ministry has also drafted corresponding retail price increases. "Lifeline" consumers, whose power consumption does not exceed 75 units, would be exempt from the price hike, according to the ministry document.
Other residential consumers, however, could see an increase ranging from Tk 0.70 to Tk 1.80 per unit, depending on their usage tier. New rates would also be set for commercial, industrial, and institutional categories.
The government last adjusted electricity prices on Feb 29, 2024, raising retail prices by 8.5 percent and wholesale prices by 5 percent. While the government had initially aimed to avoid price hikes for two years, officials stated that new realities have necessitated this midterm review.