The Bangladesh Energy Regulatory Commission (BERC) has acknowledged a proposal to raise gas prices for new industries and captive power plants.
"During a meeting, the commission decided to form an evaluation committee and send letters to distribution companies," said BERC's member (Gas), Md Mizanur Rahman on Tuesday (7 January).
Petrobangla proposed on 6 January to increase the gas price for industrial boilers and generators (captive) from the current rates of Tk30 and Tk31.75 per cubic meter, respectively, to Tk75.72.
The proposal suggested maintaining the current rates for existing customers.
BERC will issue an order after receiving the evaluation committee's report and conducting a public hearing.
Two types of pricing were proposed.
For customers with approved but inactive connections, half the gas would be priced at the existing rate, and the other half at the import price.
The current gas price for industrial use is Tk30 per cubic meter, and for captive power, it is Tk31.75.
Gas is purchased from state-owned companies like Sylhet Gas Fields Limited at Tk1 per cubic foot, Bangladesh Gas Fields Company at Tk1.25, and BAPEX at Tk4.
The blended average price from multinational companies Chevron Bangladesh and Tullow stands at Tk6.07 per cubic meter. Domestic sources provide approximately 2,000 million cubic feet of gas daily, while about 400 million is imported annually, pushing prices significantly higher.
Energy experts attribute the crisis to decades of negligence in oil and gas exploration.
Petrobangla's proposal highlighted the declining gas supply affecting industries and captive power the most.
About 75% of the supplied gas comes from domestic fields, with the remaining 25% being LNG imports.
The domestic production is expected to decline further, increasing dependence on imported LNG, which could reach 75% by the fiscal year 2030-31.
According to the proposal, the current import price of LNG is Tk65.70 per cubic meter, rising to Tk75.72 after taxes and other charges.
To sustain the sector, it is essential to narrow the price gap.
Gradual decline in domestic production and increasing demand will necessitate higher LNG imports.
By the end of fiscal 2024-25, a total of 44 LNG cargos, including 32 under long-term contracts and 12 from the spot market, will have been imported.
From January to June of the current fiscal year, an additional 57 cargos (28 under long-term contracts and 29 from the spot market) are expected to be imported, leading to a projected shortfall of Tk16,161.71 crore.
If 115 cargos are imported in 2025, the deficit may reach Tk22,315 crore, making price revision essential.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) President Hatem Ali said passing the proposal would stifle industrial growth.
It would create an uneven playing field, deterring new investments.
"Some will pay Tk30 for gas, while others pay Tk75. Those paying more will struggle to compete, as the market remains singular," he explained.
