Petrobangla wants 150pc gas tariff hike for fertiliser units

The state-run Petrobangla has sought to hike natural gas tariff for government-owned fertiliser factories to facilitate import of an increased volume of liquefied natural gas (LNG).
It has planned to import at least seven additional LNG cargoes with the proceeds from the proposed hike in tariff to feed the gas-starved fertiliser factories, officials have said.
"We have submitted a proposal to Bangladesh Energy Regulatory Commission (BERC) for raising the natural gas tariff by 150 per cent to Tk 40 per cubic metre from existing Tk 16 per cubic metre," Petrobangla Director (finance) AKM Mizanur Rahman told The Financial Express on Tuesday.
If the tariff is hiked, the Petrobangla would be able to ensure supply of 250 million cubic feet per day (mmcfd) of gas during six months (October to March) of a year, 165 mmcfd during two months -- April and May, 175 mmcfd for the month of June and 130 mmcfd during three months from July to September, he said.
Besides, the Petrobangla will be able to import a total of 115 LNG cargoes in a year, about 6.48 per cent up from the existing 108 with the proceeds from the hike in tariff, said sources.
Even after the proposed hike, there will be a deficit of Tk 83.55 billion, if seven additional cargoes are imported. The Petrobangla expects to meet the deficit with the government subsidy.
The blended cost of gas would soar to Tk 28.78 per cubic metre from the existing Tk 24.56 with the increased volume of LNG imports, it was learnt.
The BERC previously had hiked the natural gas tariff for fertiliser factories by 259.55 per cent to Tk 16 per cubic metre from the earlier rate of Tk 4.45, which came into effect on June 1, 2022.
But, the fertiliser factories are not paying gas bills regularly to Petrobangla's subsidiary gas-marketing and distribution companies, said sources.
As of June 2025, the fertiliser factories owed around Tk 10.39 billion to different gas marketing and distribution companies, they mentioned.
Petrobangla sent the tariff hike proposal to the BERC after consultation with the Bangladesh Chemical Industries Corporation (BCIC), operator of the state-owned fertiliser factories and the Ministry of Industries, said the Petrobangla official.
"We have received a proposal from Petrobangla for raising natural gas tariff for fertiliser factories," a senior BERC official said.
He, however, said similar proposals should come from the gas marketing and distribution companies too.
Gas marketing and distribution companies Titas Gas Transmission and Distribution Company Ltd (TGTDCL), Bakhrabad Gas Distribution Company Ltd, Jalalabad Gas Transmission and Distribution System Ltd, Sundarban Gas Company Ltd, Pashchimanchal Gas Company Ltd, Karnaphuili Gas Distribution Company Ltd will submit separate proposals on gas tariff hike for fertiliser factories soon, a senior TGTDCL official said.
Currently, four fertiliser plants -- Jamuna Fertilizer Factory, Ashuganj Fertilizer and Chemical Company Ltd (AFCCL), Chittagong Urea Fertilizer Ltd (CUFL), and Karnaphuli Fertilizer Company Ltd (KAFCO) -- remained shut due to unavailability of natural gas.
And the combined gas requirement for the fertiliser plants is estimated at 212 mmcfd.
Bangladesh's demand for urea fertiliser was around 1.56 million tonnes in the fiscal year 2024-2025, down from the previous fiscal's 1.748 million tonnes.
On account of procuring non-urea fertiliser, the government spent a sum of US$1.04 billion during the last fiscal year.
The government recently revised the gas tariff upward for the Karnaphuli Fertilizer Company Ltd (KAFCO), a joint venture fertilizer company, to Tk 30 per cubic metre.

Azizjst@yahoo.com