Despite pleas and protests by different consumer bodies, the government is likely to increase the price of gas from July 1.
Highly placed sources in the Bangladesh Energy Regulatory Commission (BERC) told The Independent that the new price might be declared either on June 20 or 27.
A BERC member, on condition of anonymity, told The Independent that the commission in principle has agreed on a price hike and the members are now deciding the structures of the possible rise. There might be, on average, a 20 per cent price hike in different categories, said the BERC member.
Multiple factors have prompted the BERC to backtrack from its earlier decision of not increasing the price.
This includes injection of costly LNG into the national pipeline, because of which the country is losing Tk. 7,000-8,000 crore yearly.
Bangladesh entered the LNG era in August last year after the LNG brought from Qatar was supplied into the national grid. This was done after regasification was carried out in the country’s first floating storage and regasification unit (FSRU) docked at Moheshkhali.
The government is buying LNG at Tk. 39 per SCM and selling it for Tk 7.17. Altogether, two FSRUs—one of Excelerate Energy and another of Summit—are currently supplying 500 mmcfd of regasified LNG to the network. The BERC member said they heard
the arguments and counter-arguments from gas distribution companies and consumer and rights groups during the four-day hearing in March.
The BERC started the recent round of public hearing on March 11 on the proposals placed by six gas distribution companies—Titas, Bakhrabad, Jalalabad, Pashchimanchal, Karnaphuli, and Sundarban—for the gas price hike at the consumer level.
Titas and Sunderban have demanded 208 per cent hike for the gas consumed by power plants, 211 per cent for fertiliser companies, 96 per cent for captive power plants, 132 per cent for industries, 41 per cent for commercial entities and 50 per cent for CNG-run vehicles. They are also seeking a 80 per cent rise in the monthly gas bill for both single-burner and double-burner cooking stoves, from Tk. 750 to Tk. 1,350 and from Tk. 800 to Tk. 1,440, respectively.
Gas distributors claimed they are bleeding money because of the LNG import and the subsequent LNG mix into the gas distribution network. At the same time, consumer groups argue that almost all the gas distributors show profit in their yearly accounts, so there is no logic behind the gas price hike proposal.
Terming the present situation surrounding the decision of a possible gas price hike a “bit more complex” than what the balance-sheets have shown, the BERC member said without increasing the price, the draining of money from the national exchequer could not be stopped.
Talking to The Independent, Abu Hena Md Rahmatul Munim, secretary of the Energy Division of the power, energy and mineral resources ministry, said they want the gas price to be increased. “We are waiting for the decision of BERC. Increasing the price is completely its decision,” he added.
Rahmantul Munim, however, said the gas price hike at this stage is rational and should be carried out. “We have a dwindling gas reserves and imported LNG, which is costly, is now being injected into the gas pipeline. So there must be a price re-adjustment,” he added.
The systems loss of Titas Gas Transmission and Distribution Company Limited (TGTDCL) has increased dramatically coinciding with the injection of the costly imported (LNG) into the national grid line, according to a provisional estimate obtained by The Independent.
The provisional data prepared by the company itself show the systems loss of the Titas Gas was 11.58 per cent a month in March this year with LNG supply hovering around 500 mmcf (million cubic feet) per day. In December last year, monthly systems loss was 7.14 per cent when the LNG supply was around 300 mmcf.
In 2017-18 FY, the average systems loss of Titas was 1.41 per cent, according to official data. As per Titas data, the country’s largest distribution company purchased 159.18 crore standard cubic metre (SCM) of gas in March 2019 and sold 140.05 crore SCM, indicating a missing quantity of 14.81 crore SCM after taking into account a 2.2 per cent deduction as permissible systems loss. The 14.81 crore SCM of gas is worth around Tk 570 crore. A Petrobangla and Energy Division official on condition of anonymity said the calculation of gas price is based on imported LNG price, which is Tk 39 per SCM.
Munim, also chairman of the board of the Titas Gas Transmission and Distribution Company Limited (TGTDCL), was asked about the huge system loss of the company after the injection of LNG.
In reply, Munim said: “It’s a separate issue and has nothing to do with the gas price hike proposal. We are making Titas more accountable through several measures, which will result in more transparency.”