8 April 2018, Sun, 11:52

Fresh gas price hike proposed

206pc for power plants, 25pc for CNG filling stations, no hikes for domestic, commercial for now

Gas distribution utilities have submitted proposals for fresh hikes in gas prices by 206 per cent for power plants and 25 per cent for CNG filling stations triggering fear of further increase in costs of living.

In the past week, six state-run gas distribution utilities submitted the proposals to the Bangladesh Energy Regulatory Commission against expensive liquefied natural gas imports for increasing gas supplies to 132.82 million cubic metre per day from 76.18 mmcmd, said officials of the utilities.

Earlier, the commission raised the gas prices by about 22 per cent on an average in two phases, from March 1 and June 1 in 2017, while the utilities now sought an average 75 per cent hike, from Tk 7.39 per cubic metre to Tk 12.95, they said.

Commission member Md Abdul Aziz Khan told the media that they had received the proposals which were now under examination before taking cognisance of them.

The commission would make its decision through public hearing once it takes cognisance of the proposals, he added.

Consumers Association of Bangladesh energy adviser M Shamsul Alam said that authorities concerned should have taken measures to check gas theft and wastage before importing LNG and raising gas prices.

The proposed gas price hikes for the LNG import would burden the common people with increased prices of electricity and other goods and services as almost 50 per cent gas price hikes in three phases between September 2015 and June 2017 did, he said.

Shamsul observed that the increased gas supplies would increase theft and corruption.

The gas distribution utilities submitted their proposals for price hikes based on an energy division decision approved on March 12 by its secretary Nazimuddin Chowdhury, the utility officials said.

The energy division considered the LNG import cost Tk 25.215 per cubic metre and re-gasification charge Tk 1.514 per unit, other regular margins and a 15 per cent VAT, they said, adding that the government in 2017 promised to waive 93.24 per cent supplementary duty on gas after the beginning of the import.

In their proposals, the utilities sought hikes for grid-tied power stations by 206 per cent, Tk 10 from Tk 3.16 per unit, for CNG-filling stations by 25 per cent, Tk 40 from Tk 32 per unit, for fertiliser factories by 372 per cent, Tk 12.80 from Tk 2.71 per unit, for industrial boilers by 93 per cent, Tk 15 Tk 7.76 per unit, and for captive power plants in industries by 66 per cent, Tk 16 from Tk 9.62 per unit.

The utilities did not seek hike for cooking burners used in the households and for the commercial consumers.

Among the other categories, the utilities also sought gas price hike for tea estates by 73 per cent, Tk 12.80 from Tk 7.42 per unit.

In the wake of no significant success in oil and gas explorations, the government planned to increase gas supplies by 14.16 mmcmd from late April and 14.16 mmcmd from October with imported LNG.

US company Excelerate Energy and local firm Summit are expected to prepare two floating terminals, storages and re-gasification units near Moheshkhali Island to facilitate the government’s LNG imports.

On September 25, 2017, Petrobangla signed a 15-year contract with Qatar’s state-run RasGas Company Limited to import LNG.

Under the contract, RasGas would supply 1.8 million tonnes of liquefied gas a year for the first five years and 2.5 million tonnes for the next 10 years.

Negotiations with four other state-run companies, including that of Indonesia, are underway to import and transport liquefied gas to meet growing demand for natural gas, said the officials, adding that the government would also import LNG from spot market and open tendering systems.

Gas supplies from indigenous fields already declined from its peak 77.88 mmcmd to 76.18 mmcmd against a demand of about 105 mmcmd.