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  • Last Update : 09:24 am

Gas likely to get dearer as imported fuel price adjustment mulled

  • Published at 07:37 pm June 8th, 2018
gas stove.jpg
File photo of a gas stove Collected

Merely a year after gas prices were increased for household users, industry, and captive power, the government has received proposals from gas distribution companies to increase prices again in most sectors.

The companies, according to sources, made the move following an April 22 instruction of the Power Division as the government is preparing to adjust the prices of imported gas.

According to the Bangladesh Oil, Gas, and Mineral Corporation, better known as Petrobangla, the country has a daily demand of 3.70 billion cubic feet (bcf) gas, whereas the supply is around 2.70 bcf gas, and the demand is gradually growing.

Considering the situation, the Energy and Mineral Resources Division has started importing liquefied natural gas or LNG from Qatar, with the first shipment of the fuel arriving at Moheshkhali on April 24. The fuel item is expected to be added to the national energy mix by the end of this month.

The gas companies have proposed hiking the prices for the fertilizer sector by 372% and for the power sector by 206%. If the proposals are accepted, the fertilizer and power prices both will skyrocket.

Once the prices are increased as proposed each unit of gas for the power sector, which now sells at Tk3.16, will shoot up to Tk10 and the per unit price for the fertilizer sector will jump to Tk12.80 from Tk2.71.

It has been proposed that the prices for the industry and CNG sectors be hiked by 93% and 25%, respectively. The gas companies, however, have exempted the residential and commercial users from the proposed hike.

Sources at the Bangladesh Energy Regulatory Commission (BERC) said the regulatory body will hold a public hearing on the proposals of the companies at the TCB auditorium in Karwan Bazar, Dhaka between June 11 and June 21.

On the opening day, Gas Transmission Company Ltd’s proposal will be heard, and Titas Gas Transmission and Distribution’s proposal two days later.

Hearings on the proposals of Bakhrabad Gas Distribution Company Ltd, Jalalabad Gas Transmission and Distribution System Ltd, and Karnaphuli Gas Distribution Company Ltd will be held on June 14, 18 and 19, respectively.

The Pashchimanchal Gas Company Ltd and Sundarban Gas Company Ltd will have their proposals heard on June 20 and June 21, respectively.

A BERC member said they are going to hear the proposals engaging all the stakeholders in line with the BERC rules and policy.    

A Petrobangla official also said the government is worried about the higher import prices of fuel. So, the price hike is the only option to ward off more subsidising in the energy sector.

The current production cost of each cubic foot gas is Tk4.30. After the taxes and VAT are added to the figure, the price rises to Tk9.55, but the government charges Tk7.39 at the consumer level.

However, the price will go up to Tk12.80 when the LNG is added to the national grid.

On April 23, Tawfiq-e-Elahi Chowdhury, power, energy and mineral resources affairs adviser to the prime minister, said the government would hike the gas prices to a permissible limit in phases to help industries run smoothly.

Bangladesh is importing the LNG on its own under a 15-year government-to-government purchase agreement signed with Qatar last year for 2.5 million tons of LNG per annum.

Meanwhile, Petrobangla inked another deal with Oman on May 6 to import 1 million tons of LNG annually, for 10 years. 

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