Gas distribution companies Bakhrabad Gas Distribution Company and Karnaphuli Gas Distribution Company have submitted proposals to the Bangladesh Energy Regulatory Commission (BERC) seeking to raise tariffs for non-metered residential consumers.
The proposals, if approved, could result in an increase of approximately Tk300 in monthly bills for affected households in Chattogram, Cumilla, and Chandpur.
The companies argue that until prepaid meters are installed for all non-metered households, billing should align with the Gas Marketing Rules of 2014 to reflect actual consumption more accurately.
According to these rules, consumption for single and double-burner stoves is set at 73.41 and 77.41 cubic metres, respectively.
Currently, non-metered residential consumers pay a fixed bill regardless of actual usage.
The last gas price adjustment occurred on 5 June 2022, following a public hearing. Data from prepaid meter users at that time indicated an average usage of 40 cubic metres for single-burner stoves and up to 50 cubic metres for double-burner stoves.
Consequently, consumption estimates were revised to 55 and 60 cubic metres, respectively. Some distribution companies now propose reverting to the previous higher estimates.
If the proposals are implemented, the monthly bill for a single-burner stove will rise from Tk990 to Tk1,321, while the bill for a double-burner stove will increase to Tk1,393.
Additionally, Titas Gas has submitted a separate proposal to raise consumption estimates to 76.65 cubic metres for single-burner and 88.44 cubic metres for double-burner stoves, up from the current 55 and 60 cubic metres, respectively.
BERC has yet to decide on this proposal, opting to seek third-party evaluation.
Meanwhile, Petrobangla has proposed raising the price of gas supplied to new industrial boilers and captive power generators from Tk30 and Tk31.75 to Tk75.72 per cubic metre, without altering rates for existing industrial consumers.
For approved but not yet operational consumers, the proposal suggests splitting the bill between the current rate and the new rate.
A public hearing on these proposals is scheduled for 26 February.
Concerns have been raised about the potential impact of these price hikes on tax deductions at source.
Under the Income Tax Act 2023 and related withholding tax regulations, a 2% tax is deducted at source from gas bills, excluding VAT.
Higher gas prices would consequently increase the tax burden on companies, potentially exceeding their corporate tax liabilities.
Should the proposed tariff changes be rejected, the companies would not face additional financial strain, though Petrobangla may require government subsidies to cover the revenue shortfall.
Furthermore, all distribution companies, except for Paschimanchal Gas Company and Sundarban Gas Company, have requested adjustments to the permissible system loss levels.
BERC’s 2022 directive mandates reducing system loss to below 2%.
However, Bakhrabad Gas reported a system loss of 10.06% in the 2023-24 fiscal year, followed by Titas Gas at 7.67%, Karnaphuli Gas at 3.21%, and Jalalabad Gas at 0.68%.
In contrast, Paschimanchal Gas Company achieved a system gain of 1.96% in Bogura and Rajshahi regions.
Bakhrabad, Titas, Jalalabad, and Karnaphuli have all requested that their system losses be rationalised, though specific targets have not been outlined in their proposals.
