The CNG price hike

The Bangladesh Energy Regulatory Commission (BERC) has hiked the price of CNG (compressed natural gas) by nearly 50 per cent in response to a proposal sent by the state-owned Petrobangla last October. In fact, the hike is slightly more than what was originally proposed by Petrobangla. The BERC as a mandatory provision held a public hearing, attended by the stakeholders, on March 8 this year. Though most stakeholders had opposed the CNG price-hike move, the BERC has decided to go along with the Petrobangla proposal. The BERC while announcing the hike in CNG price last Thursday argued that only the affluent section of the population living in urban areas was benefited from the cheap CNG through its use in their automobiles and that it (BERC) had only tried to make a rational price adjustment vis-à-vis other fuels such as octane and diesel. However, the chairman of the Commission admitted that the price-hike would have a negative effect on mass transportation. Yet he was optimistic about a positive impact of the decision on reducing the terrible traffic gridlocks in Dhaka city. What, apparently, has motivated the government more for the price-hike is the additional revenue it would be getting from it. According to an estimate, the government alone would earn revenues worth more than Tk 11 billion due to the rise in the price of CNG. The Petrobangla, which would get Tk 8.10 against the sale of each unit of CNG at Tk 25, would contribute Tk 2.014 out of that amount to the newly introduced gas development fund to help carry out the development of the country's gas sector. There is no denying that CNG is cheaper in Bangladesh compared to that in other countries and it did deserve some upward adjustment. But the decision to increase its price by 50 per cent at one-go, that too at a time when prices of most essentials have skyrocketed, is not a prudent one. Privately-owned motor cars are not the only transport running on CNG fuel. Thousands of passenger buses and goods carrying trucks are now CNG-run. Since CNG filling stations have sprung up along the highways running between Dhaka and Chittagong and between Dhaka and the northern districts of the country, a substantial number of trucks that carry daily essentials are now CNG-based. The people who use public transport such as buses and auto-rickshaws are already feeling the heat; some CNG-run buses and three-wheelers have increased their fares arbitrarily at rates almost equivalent to the CNG price hike, leading to exchanges of heated words by the transport operators and passengers. The president of the CNG-run bus owners' association has already said that the association would submit a proposal to hike the bus fares by more than 100 per cent. Then again, the CNG price hike coupled with the latest hike in diesel prices by Tk 2.0 per litre would add to inflationary pressure. One more issue that deserves attention is the attempt to portray the private car users as villains, in terms of CNG use. It was none but the government itself which had run promotional campaigns to motivate the motor vehicle owners to convert their vehicles into CNG-run ones and, thus, help save 'hard earned' foreign exchange used to import liquid fuels. The presence of private cars is not alone responsible for the present deplorable traffic situation in Dhaka. The factors responsible for the traffic gridlocks are mainly systemic. The men responsible for city traffic management are aware of those factors some, of which can easily be eliminated to bring some order in the city's traffic system.