Petrobangla's gas price hike proposal opposed
Thursday, 25 September 2008
FE Report
The energy sector stakeholders including trade bodies, consumers' associations and members of the civil society in a public hearing Wednesday opposed Petrobangla's proposal of raising the gas price by 65 per cent on an average for all categories of consumers.
They opined that the drastic hike in gas prices would seriously hamper the country's investment and industrial growth leaving an adverse impact on the national economy.
The hearing took place at the Bangladesh Energy Regulatory Commission (BERC) office in the city.
'The decision over Petrobangla's proposed gas price hike will be taken by October next in the form of an order,' BERC chairman Golam Rahman said on conclusion of the hearing.
Interested stakeholders will be able to submit their post-hearing comments by October 6, he added.
Taking part in the hearing, a representative of the Metropolitan Chamber of Commerce and Industry (MCCI) termed the gas price hike proposal unethical.
The gas price hike would have a chain effect on the national economy with a rise in power tariffs and a subsequent hike in industrial production costs, he said.
The previous gas price hikes were modest, he said adding that the BERC should examine pros and cons before giving a verdict.
The representative of Dhaka Chamber of Commerce and Industry (DCCI) underscored the necessity for ensuring efficiency, transparency and accountability in activities of the public sector gas entities including Petrobangla and its associated companies.
The state-owned gas companies are running recording very high system losses due to their inefficiency and corruption, he said, adding that the consumers should not shoulder the burdens of their inefficiency.
The representative from the Consumers Association of Bangladesh (CAB) said the government should not be guided by a motive of profit through operations of the state-owned companies, rather should act as a facilitator to boost industrial growth and consider public sufferings.
The government should have a policy regarding its subsidy, he argued.
Rice price might go up as high as to Tk 50-60 per kg if the gas price is raised, the representative from the Transparency International Bangladesh (TIB) argued.
Petrobangla chairman Jalal Ahmed, however, defended the gas-price hike proposal, saying Petrobangla would not be able to continue its operation of supplying gas due to losses if the gas price is not hiked.
Representatives from state-owned Power Development Board (PDB), Bangladesh Chemical Industries Corporation (BCIC), Bangladesh Textile Mills Association (BTMA) and the civil society also took part in the hearing.
The Petrobangla in June last placed a proposal for enhancing the natural gas price by 53 per cent on an average from Tk 92.84 per MCF (1,000 cubic feet) to Tk 142.75 per unit to offset its losses.
The state-owned parent gas company incurs losses as it purchases gas at higher prices from the international oil companies (IOCs) and sells it at lower rates, it argued.
In its tariff hike proposal, the Petrobangla pleaded for gas price hike to Tk 93.73 per MCF from existing Tk 73.91 per MCF for power plants owned by the Bangladesh Power Development Board (BPDB), independent power producers (IPPs) and small power plants (SPPs).
It proposed the hike to Tk 93.73 per MCF from Tk 63.41 per MCF for fertiliser factories and Tk 182.25 per MCF from existing Tk 105.59 for captive power plants.
The Petrobangla also proposed raising the gas tariff to Tk 182.25 per MCF for industries from existing Tk 148.13 per MCF, Tk 182.25 for tea estates from present Tk 148.13 per MCF and Tk 291.59 per MCF for commercial usage from the existing Tk 233.12 per MCF.
For domestic users the gas price has been proposed at Tk 550 for single burner from the existing rate of Tk 350 and Tk 600 for double burner from existing Tk 400.
This is for the first time in Bangladesh's history that a separate entity other than the ministry is deciding on hike in gas tariffs.
The energy sector stakeholders including trade bodies, consumers' associations and members of the civil society in a public hearing Wednesday opposed Petrobangla's proposal of raising the gas price by 65 per cent on an average for all categories of consumers.
They opined that the drastic hike in gas prices would seriously hamper the country's investment and industrial growth leaving an adverse impact on the national economy.
The hearing took place at the Bangladesh Energy Regulatory Commission (BERC) office in the city.
'The decision over Petrobangla's proposed gas price hike will be taken by October next in the form of an order,' BERC chairman Golam Rahman said on conclusion of the hearing.
Interested stakeholders will be able to submit their post-hearing comments by October 6, he added.
Taking part in the hearing, a representative of the Metropolitan Chamber of Commerce and Industry (MCCI) termed the gas price hike proposal unethical.
The gas price hike would have a chain effect on the national economy with a rise in power tariffs and a subsequent hike in industrial production costs, he said.
The previous gas price hikes were modest, he said adding that the BERC should examine pros and cons before giving a verdict.
The representative of Dhaka Chamber of Commerce and Industry (DCCI) underscored the necessity for ensuring efficiency, transparency and accountability in activities of the public sector gas entities including Petrobangla and its associated companies.
The state-owned gas companies are running recording very high system losses due to their inefficiency and corruption, he said, adding that the consumers should not shoulder the burdens of their inefficiency.
The representative from the Consumers Association of Bangladesh (CAB) said the government should not be guided by a motive of profit through operations of the state-owned companies, rather should act as a facilitator to boost industrial growth and consider public sufferings.
The government should have a policy regarding its subsidy, he argued.
Rice price might go up as high as to Tk 50-60 per kg if the gas price is raised, the representative from the Transparency International Bangladesh (TIB) argued.
Petrobangla chairman Jalal Ahmed, however, defended the gas-price hike proposal, saying Petrobangla would not be able to continue its operation of supplying gas due to losses if the gas price is not hiked.
Representatives from state-owned Power Development Board (PDB), Bangladesh Chemical Industries Corporation (BCIC), Bangladesh Textile Mills Association (BTMA) and the civil society also took part in the hearing.
The Petrobangla in June last placed a proposal for enhancing the natural gas price by 53 per cent on an average from Tk 92.84 per MCF (1,000 cubic feet) to Tk 142.75 per unit to offset its losses.
The state-owned parent gas company incurs losses as it purchases gas at higher prices from the international oil companies (IOCs) and sells it at lower rates, it argued.
In its tariff hike proposal, the Petrobangla pleaded for gas price hike to Tk 93.73 per MCF from existing Tk 73.91 per MCF for power plants owned by the Bangladesh Power Development Board (BPDB), independent power producers (IPPs) and small power plants (SPPs).
It proposed the hike to Tk 93.73 per MCF from Tk 63.41 per MCF for fertiliser factories and Tk 182.25 per MCF from existing Tk 105.59 for captive power plants.
The Petrobangla also proposed raising the gas tariff to Tk 182.25 per MCF for industries from existing Tk 148.13 per MCF, Tk 182.25 for tea estates from present Tk 148.13 per MCF and Tk 291.59 per MCF for commercial usage from the existing Tk 233.12 per MCF.
For domestic users the gas price has been proposed at Tk 550 for single burner from the existing rate of Tk 350 and Tk 600 for double burner from existing Tk 400.
This is for the first time in Bangladesh's history that a separate entity other than the ministry is deciding on hike in gas tariffs.