Power prices too go up, given retrospective effect from Feb 01

In a change of stance, the government Thursday announced the hike in power rates for all categories of consumers with retrospective effect from February 01, 2024.
State Minister for power, energy and mineral resources Nasrul Hamid briefing the newsmen at his ministry said power tariff will be hiked between Tk.0.34 and Tk.0.70 per unit with effect from February 1 last. He had earlier said the power rate hike would be effective from March 01, 2024.
On Tuesday last, the government through a gazette notification had also increased the gas tariff for power plants by 5.36 per cent and captive power plants by 2.5 per cent. That hike too was given retrospective effect from February 01.
About petroleum products, Mr Nasrul Hamid informed the newsmen of the government's decision to introduce the dynamic price mechanism from today (March 01).
UNB adds: "Each month fuel price will be declared for the consumers", he said adding neighbouring India do this every day.
He noted that the steps have been taken to minimise the government losses caused by the increase in dollar rate. "This year the government will incur loss of Tk 43,000 crore due to sale of electricity at lower price," he said.
This step has been taken as part of the government move to come out of the subsidy now being given to the power sector, said the minister.
According to the BPDB's Annual Report 2022-23, the fiscal year saw the production of 87,024 million kilowatt hours of electricity at a total cost of TK 98,646 crore.
Its per unit production cost was Tk 11.33, while it was selling electricity at Tk 6.7 per unit -- incurring a loss of about Tk 4.63 per unit.
This imbalance has led to a staggering loss of Tk 47,788 crore for the fiscal year, as the government grapples with purchasing power from private and international sources at significantly higher rates.
With this huge loss, the government has been facing great trouble as it has to purchase electricity worth Tk 82,778 crore from private sector power producers, while it generates electricity worth Tk 13,307 crore from its own generation plants.
The annual report also shows that the BPDB's average per unit production cost from its own plants is Tk 7.63, while it is Tk 14.62 at the independent power producers or IPPs (private sector), at rental plants Tk 12.53, at public plants Tk 6.85, and imported power from India at Tk 8.77.
The government purchases electricity from the private sector and India in dollars.
The government has announced the new power tariff for bulk consumers raising it by 5 per cent from existing Tk 6.70 per unit to Tk 7.04 meaning a rise of Tk 0.34 per unit (each kilowatt hour) with effect from February 1.
The bulk consumers are mainly the distribution entities and large industries who receive electricity at 33 kV, 132 kV and 230 kV transmission lines directly from the single buyer and principal organization in the power sector, the Bangladesh Power Development Board (BPDB).
"So, it will have no effect on the power tariff applicable for the retail consumers until the government announces a new tariff for retail consumers," a top official of the BPDB told the news agency.
There are six distribution entities -- Bangladesh Rural Electrification Board (BREB), Dhaka Power Distribution Company Limited (DPDC), Dhaka Electric Supply Company Limited (Desco), Northern Electricity Supply Company PLS (Nesco), West Zone Power Distribution Company Limited (WZPDCL) and also BPDB, which is itself involved in power distribution.
As per a gazette notification, dated February 29, the distribution entities will purchase electricity from BPDB at Tk 8.44 per unit electricity at 230 kV, Tk 8.47 at 132 kV and Tk 7.62 at 33 kV level.
Besides, a separate gazette notification was also issued raising the transmission charge as well for the entities.