gas price hike proposal

BERC says no to Karnaphuli

A proposal by the Karnaphuli Gas Distribution Company Ltd (KGDCL) to hike gas prices has been rejected. The technical evaluation committee (TEC) of the Bangladesh Energy Regulatory Commission (BERC) said yesterday that the company was likely to make enough revenue in the current fiscal. Hence, the proposal could not be justified. The TEC calculated that KGDCL would generate  additional revenues of  Tk. 267.07 million in the 2016–17 fiscal year. According to the committee, a distribution charge of Tk. 0.1565 per cubic metre would be enough to meet KGDCL’s costs. However, the KGDCL is charging Tk. 0.2428 per cubic metre, the technical team observed. “So, it is earning an additional Tk. 0.0863 as revenue,” the committee pointed out. It argued that the company would earn Tk. 880.52 million in the current fiscal year. The KGFCL had proposed that the tariff be hiked by Tk. 0.7900 per cubic metre. During the hearing, economist Prof. Nurul Islam said under Article 143 of the Constitution, the people are the owners of mineral resources. “So, the BERC hearing and announcement of gas tariff hike should reflect the rights of 17 crore people instead of fulfilling the government’s directive,” he argued. Energy adviser to the Consumer Association of Bangladesh (CAB), Prof. Shamsul Alam, proposed a separate tariff for public and private transport services. He also raised a question about the workers’ welfare fund and the KGDCL’s system loss. Opposing KGDCL’s price hike proposal, Farhan Noor, general secretary of the CNG Filling Station and Conversion Workshop Owners’ Association, said the government should lower the price of CNG instead. “Since the government has reduced the price of oil in the domestic market, the price discrimination has affected our business,” he said, adding that the Tk. 6,000-crore investment in the CNG sector was on the brink of disaster. He argued that a CNG price hike would discourage its use in public transport. As a result, air pollution would rise tremendously and the country would turn into a “gas chamber”. He also noted that the CNG sector consumes only 5 per cent of the total gas consumption while it contributes 22 per cent of the revenue to the national exchequer. During the hearing, the KGDCL official said the company was supplying gas to 602,074 consumers through 3,000 km of distribution lines. The company was receiving only 249mmcfd (million cubic feet per day) of gas against a demand for 450mmcfd. The company would require at least an additional 100mmcfd of gas to provide new connections to applicants, he said. BERC chairman AR Rahman chaired the hearing, which was attended by members Rahman Morshed and Moklesur Rahman, Communist Party of Bangladesh (CPB) representative Ruhul Hossain Prince, Gono Sanghati Andolon coordinator Joniad Saki and other energy experts.

gas price hike proposal

BERC says no to Karnaphuli

A proposal by the Karnaphuli Gas Distribution Company Ltd (KGDCL) to hike gas prices has been rejected. The technical evaluation committee (TEC) of the Bangladesh Energy Regulatory Commission (BERC) said yesterday that the company was likely to make enough revenue in the current fiscal. Hence, the proposal could not be justified. The TEC calculated that KGDCL would generate additional revenues of Tk. 267.07 million in the 201617 fiscal year. According to the committee, a distribution charge of Tk. 0.1565 per cubic metre would be enough to meet KGDCLs costs. However, the KGDCL is charging Tk. 0.2428 per cubic metre, the technical team observed. So, it is earning an additional Tk. 0.0863 as revenue, the committee pointed out. It argued that the company would earn Tk. 880.52 million in the current fiscal year. The KGFCL had proposed that the tariff be hiked by Tk. 0.7900 per cubic metre. During the hearing, economist Prof. Nurul Islam said under Article 143 of the Constitution, the people are the owners of mineral resources. So, the BERC hearing and announcement of gas tariff hike should reflect the rights of 17 crore people instead of fulfilling the governments directive, he argued. Energy adviser to the Consumer Association of Bangladesh (CAB), Prof. Shamsul Alam, proposed a separate tariff for public and private transport services. He also raised a question about the workers welfare fund and the KGDCLs system loss. Opposing KGDCLs price hike proposal, Farhan Noor, general secretary of the CNG Filling Station and Conversion Workshop Owners Association, said the government should lower the price of CNG instead. Since the government has reduced the price of oil in the domestic market, the price discrimination has affected our business, he said, adding that the Tk. 6,000-crore investment in the CNG sector was on the brink of disaster. He argued that a CNG price hike would discourage its use in public transport. As a result, air pollution would rise tremendously and the country would turn into a gas chamber. He also noted that the CNG sector consumes only 5 per cent of the total gas consumption while it contributes 22 per cent of the revenue to the national exchequer. During the hearing, the KGDCL official said the company was supplying gas to 602,074 consumers through 3,000 km of distribution lines. The company was receiving only 249mmcfd (million cubic feet per day) of gas against a demand for 450mmcfd. The company would require at least an additional 100mmcfd of gas to provide new connections to applicants, he said. BERC chairman AR Rahman chaired the hearing, which was attended by members Rahman Morshed and Moklesur Rahman, Communist Party of Bangladesh (CPB) representative Ruhul Hossain Prince, Gono Sanghati Andolon coordinator Joniad Saki and other energy experts.