Closely following the format of Petrobangla’s submission, 6 gas distribution companies have recently submitted proposals to the Bangladesh Energy Regulatory Commission (BERC) to increase gas prices.
Sources indicate that these proposals have been prepared in a manner that replicates Petrobangla’s suggestions almost verbatim, including the justification for the price hike.
The rationale provided for the increase revolves around the high costs associated with importing liquefied natural gas (LNG).
Unlike previous proposals, which detailed potential economic and commercial impacts of price adjustments, this latest batch of proposals lacks such comprehensive explanations, both from Petrobangla and the distribution companies.
BERC Chairman Jalal Ahmed, said, “Several distribution companies have submitted their proposals, which are currently under review by the technical committee. Our aim is to expedite the decision-making process to prevent any allegations of delays on BERC’s part.”
On 6 January, Petrobangla proposed to increase the gas price for new industrial boilers and captive generators from Tk30 and Tk31.75 to Tk75.72 per cubic metre, while keeping the rates for existing customers unchanged.
The proposal suggests a mixed rate for approved customers, splitting their bill at the current rate and the proposed higher rate.
Legally, only licensed entities can submit proposals for price hikes, necessitating BERC’s directive to distribution companies like Titas Gas Transmission and Distribution PLC, Western Zone Gas Company Limited, Jalalabad Gas Transmission and Distribution System Limited, Bakhrabad Gas Distribution Company, Karnaphuli Gas Distribution Company Limited, and Sundarban Gas Company Limited to submit their price adjustment proposals.
Senior officials from multiple distribution companies, under anonymity, expressed discomfort with the significant proposed hike, citing its lack of justification for the 152% increase for industrial and captive users.
“Petrobangla is using us as a front to push for this price hike,” they said.
“We are not in agreement with this increase and are concerned about facing consumer backlash during public hearings.”
Currently, gas is purchased at Tk1 per cubic metre from Sylhet Gas Fields Company Limited, Tk1.25 from Bangladesh Gas Fields Company, and Tk4 from BAPEX. Combined with gas from multinational companies Chevron Bangladesh and Tullow, the average price stands at Tk6.07 per cubic metre.
Petrobangla’s proposal indicates that the current import cost of LNG per cubic metre is Tk65.70, rising to Tk75.72 after adding VAT and other charges.
To sustain the sector, they argue, the price gap must be reduced, as Petrobangla faces a projected deficit of approximately Tk16,161.71 crore in the current fiscal year due to planned LNG imports.
Business leaders and organisations have reacted strongly against the proposed price hike, demanding an immediate halt to the process.
They fear that approving such an increase could halt industrial growth in the country.
BERC has formed a technical committee to review the proposals, which, as per procedure, will lead to a public hearing before any order is issued.
