It also proposed that the new pricing be made effective from April 1.
PDB’s proposal says it is necessary to raise power tariff to Tk5.59 from Tk4.87 in current fiscal year to bridge the loss gap.
An official of the PDB told the Dhaka Tribune requesting anonymity: “The government is providing a lot of power connections in rural areas. In those areas the price of power is very low. As a result, the deficit between cost and revenue has gone up.”
The PDB is now selling per unit electricity to power distribution companies for Tk4.90 but for the expense raise the price is now Tk4.87.
“We received the proposal of the PDB to raise the power tariff at bulk level on February 23,” an official of BERC told the Dhaka Tribune on Saturday seeking anonymity.
The PDB is facing losses because of constantly rising cost of production but the bulk tariff has not increased correspondingly, PDB Chairman Khaled Mahmood told the Dhaka Tribune on Saturday.
“We want to reduce the government’s subsidy burden in the power sector,” he said.
The PDB had to face Tk3,500 crore financial losses last year, Khaled said.
As the price of gas has been raised already, it is rational to raise the price of electricity, he added.
After the PDB’s proposal goes through, the distribution companies will in turn propose to raise retail power tariffs, which will be raised at public hearings by BERC.
The PDB in its proposal said it purchases power from rental and IPP power plants, Electricity Generation Company of Bangladesh (EGCB) Ltd, Rural Power Company Limited (RPCL), Ashuganj Power Station Company Ltd (APSCL) and North-West Power Generation Company Limited (NWPGCL).
It sells power to its bulk consumers – Dhaka Power Distribution Company Ltd (DPDC), Dhaka Electric Supply Company Ltd (Desco), Rural Electrification Board (REB), West Zone Power Distribution Company Limited (WZPDCL), North West Zone Power Distribution Company Limited (NWZPDC) and to its retail consumers in its own distribution regions – at the price fixed by the BERC.
Last year, those five state-owned power distribution companies sent proposals to BERC to raise retail power tariffs but the BERC never took it into account.
Prof Shamsul Alam, energy adviser of the Consumers Association of Bangladesh, told the Dhaka Tribune: “If we think in line with the international market, then this type of decision is completely illogical. The PDB should reduce the electricity price rather than raise it.”
The simaltenous gas and electricity price hike would have a severe impact on household costs, he said.