Why increase in electricity price?

When the government is expected to lower the price of electricity taking stock of the reduced oil price on the international market, contrary to this expectation of the people, Bangladesh Energy Regulatory Commission (BERC) is reportedly trying again to increase the price of electricity. In the last tenure of the present government, it increased six times the electricity price. At that time to meet up the huge gap of demand and supply of electricity, the government had to allow rental and quick rental power plants that consumes furnace oil.
 Despite the pleas from the consumers, the government greatly increased price of electricity within the span of five years. After the first year of the present tenure, the relevant authorities tried to push up the price of both electricity and gas again, but in the face of protest from the consumers, it backtracked. Now again the BERC has advanced its agenda of increase. But the point of argument is for the last few years the price of oil has come down from $140 to now only 56 per barrel, and this means the cost of electricity generation in the country has plummeted accordingly.
If it is so, then why this effort again to increase price when actually it is necessary to lower both the price of electricity and oil? Several times the Finance Minister AMA Muhith pointed out that the government gives subsidy to electricity, but currently the oil price internationally is so low, power generation has ceased to become a case of subsidy.
In fact, against the backdrop of decreasing trend in oil price, the government right from the beginning pursued a wrong policy in this regard. The reduction in price of oil could be a great opportunity to increase domestic growth and we suggested this in this column repeatedly and the government did not pay to the matter. In fact, many developing countries including India picked up this growth opportunity and advanced their economy.
Now if government does not reduce the price of oil on the one hand and on the other increases the price of electricity, the economy of Bangladesh may become uncompetitive, which is not desirable at all. Therefore, no argument can support BERC’s recent attempt to increase the electricity price. It is really not understandable when the government is on the one hand is telling us the country would be a middle income one by the year 2021 but on the other hand it is trying to create an atmosphere which is not congenial for achieving that target. It is expected that relevant authorities including the BERC would realise the matter.

Why increase in electricity price?

When the government is expected to lower the price of electricity taking stock of the reduced oil price on the international market, contrary to this expectation of the people, Bangladesh Energy Regulatory Commission (BERC) is reportedly trying again to increase the price of electricity. In the last tenure of the present government, it increased six times the electricity price. At that time to meet up the huge gap of demand and supply of electricity, the government had to allow rental and quick rental power plants that consumes furnace oil. Despite the pleas from the consumers, the government greatly increased price of electricity within the span of five years. After the first year of the present tenure, the relevant authorities tried to push up the price of both electricity and gas again, but in the face of protest from the consumers, it backtracked. Now again the BERC has advanced its agenda of increase. But the point of argument is for the last few years the price of oil has come down from $140 to now only 56 per barrel, and this means the cost of electricity generation in the country has plummeted accordingly. If it is so, then why this effort again to increase price when actually it is necessary to lower both the price of electricity and oil? Several times the Finance Minister AMA Muhith pointed out that the government gives subsidy to electricity, but currently the oil price internationally is so low, power generation has ceased to become a case of subsidy. In fact, against the backdrop of decreasing trend in oil price, the government right from the beginning pursued a wrong policy in this regard. The reduction in price of oil could be a great opportunity to increase domestic growth and we suggested this in this column repeatedly and the government did not pay to the matter. In fact, many developing countries including India picked up this growth opportunity and advanced their economy. Now if government does not reduce the price of oil on the one hand and on the other increases the price of electricity, the economy of Bangladesh may become uncompetitive, which is not desirable at all. Therefore, no argument can support BERCs recent attempt to increase the electricity price. It is really not understandable when the government is on the one hand is telling us the country would be a middle income one by the year 2021 but on the other hand it is trying to create an atmosphere which is not congenial for achieving that target. It is expected that relevant authorities including the BERC would realise the matter.