Distributors seek 120pc hike in gas prices

No change proposed for household, commercial gas

Gas distribution companies yesterday submitted proposals to the energy regulator for an average 120 per cent increase in gas prices, sources with the gas companies told The Independent. However, the companies, three out of six that have submitted proposals so far, have not made any hike in prices for gas used at household lever or for commercial purposes in their proposals to the regulator Bangladesh Energy Regulatory Commission (BERC). Justifying the proposed hike gas prices, officials said the average gas price per unit currently stands at Tk 7.39 per unit and if the proposed prices are implemented, the price would be Tk 12.95 per unit. But starting from April, the government is going to blend 1,000 million cubic feet (MMCF) of imported LNG, which costs around Tk 32 per unit in the international market, with the locally produced natural gas to raise supplies, and this will push up the average cost of gas per unit, they said.

So far Titas Gas Transmission and Distribution Company Ltd and Bakhrabad Gas Distribution Company Ltd have submitted their final proposals. The transmission company Gas Transmission Company Limited (GTCL) has also submitted the proposal. The rest of the distribution companies—Bakhrabad Gas Distribution Company Ltd, Jalalabad Gas Distribution Company Ltd, Karnafuli Gas Distribution Company Ltd and Sundarban Gas Distribution Company Ltd are likely to submit the proposal of gas price hike today

Talking with The Independent, Mir Moshiur Rahman, Managing Director of Titas Gas said they have submitted the proposal as per the recommendations made from by the highest level of the government.

“We didn’t propose to raise the price of gas for the household use as the government asked us not to do so,” he said.

At present, the gas based power plants are paying Tk 3.16 for per unit gas, if the proposed price is accepted, they will pay Tk 10 for per unit, an increase of about 216 per cent.

The fertilizer factories would face the highest price hike, a massive 372 per cent, as they are currently paying Tk 2.17 per unit and with the new price, it will go to Tk 12.80. Besides, for CNG-station feed gas, a 25 per cent hike has been proposed from Tk 32 to Tk 40 per unit. Per unit of gas for the industrial sector, which consumes about 10 per cent of the total gas production, is currently priced at Tk 7.76. In the proposal, the gas distribution companies have asked for Tk 15 per unit, an increase of 93 per cent.

Captive power would be costlier as the price per unit has been proposed 66 per cent higher, from 9.62 taka to 16 taka. The tea gardens users will have to pay more as the distribution companies proposed 12.80 taka per unit from the earlier 7.42 taka, a rise by 72 per cent. But they did not proposed any hike for gas used in commercial purposes, where they currently pay Tk 17.04 per unit. Citing reason behind the proposed gas hike, the Titas Gas MD said said the government wants to adjust the price of natural gas with that of imported LNG.

He said the average gas sales rate in Bangladesh is usually Tk 221.7 per mmcfd. This price is Tk 20-30 lower per unit than the LNG. Therefore, the need for price adjustment after LNG import is very necessary.

Speaking in support of the gas price hike, Mohammad Al Mamun, Managing Director of Karnafuli Gas Distribution Company Ltd said the proposal for raising gas prices is very rational and time-befitting. “We haven’t submitted our proposal yet, but our proposal will not have much of a difference with the ones of other companies,” he said.

Earlier, the State Minister for Power, Energy and Mineral Resources Nasrul Hamid told The Independent that the prices for industrial and commercial gas supplies as well as power plants have to be revised after LNG import begins.

He said that the country is ultimately heading towards liquefied natural gas (LNG) and when it start using that, the prices will have to be increase manifold due to high prices in the international market.

Gas prices were revised up by an average of 22.70 percent in February last year with households hit with over a 50 percent monthly rise for stoves.

Meanwhile, experts concerned with the sector said, if the price of gas is increased, it will automatically raise the price of electricity, which will put more pressure on the common people.

 

Distributors seek 120pc hike in gas prices

No change proposed for household, commercial gas

Gas distribution companies yesterday submitted proposals to the energy regulator for an average 120 per cent increase in gas prices, sources with the gas companies told The Independent. However, the companies, three out of six that have submitted proposals so far, have not made any hike in prices for gas used at household lever or for commercial purposes in their proposals to the regulator Bangladesh Energy Regulatory Commission (BERC). Justifying the proposed hike gas prices, officials said the average gas price per unit currently stands at Tk 7.39 per unit and if the proposed prices are implemented, the price would be Tk 12.95 per unit. But starting from April, the government is going to blend 1,000 million cubic feet (MMCF) of imported LNG, which costs around Tk 32 per unit in the international market, with the locally produced natural gas to raise supplies, and this will push up the average cost of gas per unit, they said. So far Titas Gas Transmission and Distribution Company Ltd and Bakhrabad Gas Distribution Company Ltd have submitted their final proposals. The transmission company Gas Transmission Company Limited (GTCL) has also submitted the proposal. The rest of the distribution companiesBakhrabad Gas Distribution Company Ltd, Jalalabad Gas Distribution Company Ltd, Karnafuli Gas Distribution Company Ltd and Sundarban Gas Distribution Company Ltd are likely to submit the proposal of gas price hike today Talking with The Independent, Mir Moshiur Rahman, Managing Director of Titas Gas said they have submitted the proposal as per the recommendations made from by the highest level of the government. We didnt propose to raise the price of gas for the household use as the government asked us not to do so, he said. At present, the gas based power plants are paying Tk 3.16 for per unit gas, if the proposed price is accepted, they will pay Tk 10 for per unit, an increase of about 216 per cent. The fertilizer factories would face the highest price hike, a massive 372 per cent, as they are currently paying Tk 2.17 per unit and with the new price, it will go to Tk 12.80. Besides, for CNG-station feed gas, a 25 per cent hike has been proposed from Tk 32 to Tk 40 per unit. Per unit of gas for the industrial sector, which consumes about 10 per cent of the total gas production, is currently priced at Tk 7.76. In the proposal, the gas distribution companies have asked for Tk 15 per unit, an increase of 93 per cent. Captive power would be costlier as the price per unit has been proposed 66 per cent higher, from 9.62 taka to 16 taka. The tea gardens users will have to pay more as the distribution companies proposed 12.80 taka per unit from the earlier 7.42 taka, a rise by 72 per cent. But they did not proposed any hike for gas used in commercial purposes, where they currently pay Tk 17.04 per unit. Citing reason behind the proposed gas hike, the Titas Gas MD said said the government wants to adjust the price of natural gas with that of imported LNG. He said the average gas sales rate in Bangladesh is usually Tk 221.7 per mmcfd. This price is Tk 20-30 lower per unit than the LNG. Therefore, the need for price adjustment after LNG import is very necessary. Speaking in support of the gas price hike, Mohammad Al Mamun, Managing Director of Karnafuli Gas Distribution Company Ltd said the proposal for raising gas prices is very rational and time-befitting. We havent submitted our proposal yet, but our proposal will not have much of a difference with the ones of other companies, he said. Earlier, the State Minister for Power, Energy and Mineral Resources Nasrul Hamid told The Independent that the prices for industrial and commercial gas supplies as well as power plants have to be revised after LNG import begins. He said that the country is ultimately heading towards liquefied natural gas (LNG) and when it start using that, the prices will have to be increase manifold due to high prices in the international market. Gas prices were revised up by an average of 22.70 percent in February last year with households hit with over a 50 percent monthly rise for stoves. Meanwhile, experts concerned with the sector said, if the price of gas is increased, it will automatically raise the price of electricity, which will put more pressure on the common people.