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Fair gas for all

  • Published at 12:01 am April 9th, 2019
Photo: Mahmud Hossain Opu

Would reducing the disparity in gas prices help anyone?

The industrial development so far achieved in Bangladesh is not rational if looked at from a regional approach. All of our industrial units are concentrated around Dhaka and Chittagong, as these areas have access to very low-cost fuel: Natural gas.

Most citizens within and nearby the two districts are direct beneficiaries of industrial development.

A very negligible portion of the population from the rest of the country has employment opportunities in the mentioned areas. Availability of fuel gas at a very low price is one of the significant factors behind the localization of industries in these two regions.

The government has the responsibility to develop an environment congenial enough to set up industries in every region of the country. As fuel gas supply in every region is not possible, and will not be possible in the near future, the government has to make alternative arrangements to make way for a level playing field to industries.

Industries that consume liquid fuel cannot compete with ones that consume low-priced fuel gas in Dhaka and Chittagong. In order to decentralize, price difference between gas and liquid fuel needs to be eliminated gradually.

A “one commodity one price” policy needs to be adopted to ensure that.

In Bangladesh, the price of natural gas is significantly low compared to liquid fuel -- CNG gas rate is Tk40 per cubic metre, whereas, one-litre diesel costs Tk57. Like other commodities, fuel gas should have one single rate.

Of course, there should be a difference between retail and wholesale price. The government does not pay the same price to local and international gas exploration facilities operating in Bangladesh. Local gas exploration companies are getting Tk25 per 1,000 cubic metre gas extraction, while international companies are getting over $2 for the same quantity of gas extracted.

The same price should be given to all gas extractors.

After LNG import and blending with local gas, the average cost to the government stands at Tk12.19 per cubic metre. Consumer groups which are paying higher than Tk12.19 per cubic metre may pay the prevailing higher rate. This policy will reduce the disparity in prices from consumer to consumer. The price will be more rational. 

Md Ashraf Hossain is a freelance contributor.

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