BERC hints at gas price hike

Considering a possible gas price hike at the bulk level, the Bangladesh Energy Regulatory Commission (BERC) yesterday hinted at a price increase at the retail level, too. On the last day of the eight-day-long mass hearing at the BERC headquarters in Karwanbazaar, in which Petrobangla and its related organisations took part, a commission member hinted at a possible increase in gas prices. BERC member Md Maqsudul Haque said that as the prices of essential goods have increased, the price of gas might go up, too. However, he assured everyone that if the price is indeed hiked, it would be done after careful evaluation. BERC chairman AR Khan added that the price would not be hiked on the basis of speculations. “The commission will consider it rationally and take a decision after calculations,” he said. Replying to a query by journalists about when the price could be hiked, Khan said the commission would take a decision within the next 90 days.
Petrobangla had originally proposed a 65.45 per cent hike and asked for an increase in bulk gas price from Tk. 6.29 to Tk. 10.29 per cubic metre on weighted average.
In its proposal, Petrobangla had explained that since the government had imposed a fixed 55 per cent supplementary duty (SD) and value added tax (VAT) on the gas bought from international oil companies, the net price had gone up from Tk. 4.98 to Tk. 10.91 per cubic metre. Hence, Petrobangla had asked for an increase at the bulk level.
Earlier, the six distribution companies of Petrobangla had asked for a 94.89 per cent price increase and had placed a proposal to hike the price of gas at the retail level from Tk. 6.10 to Tk. 11.89 per cubic metre on weighted average.
Besides, the Gas Transmission Co. Ltd (GTCL) had placed a proposal to increase the gas transmission price from Tk. 0.1565 to Tk. 0.3665 per cubic meter.
The technical evaluation committee (TEC) of the energy regulator, however, declined the price hike proposals of most of the companies at the hearing. The TEC observed that since most of them were making profits, they did not need to increase the prices.
Prof. Dr Shamsul Alam, the energy adviser to the Consumers’ Association of Bangladesh (CAB), strongly opposed the price hike proposal on the last day, saying that there was no logic in the price hike on the pretext of an increase in SD and VAT.
The government takes 55 per cent of the gas price while 45 per cent is taken by the companies.
“The companies undertook many projects that are yet to materialise. However, they want the price increased now, based on the cost of those projects,” Prof. Dr Alam pointed out.
He added that if BERC has to consider Petrobangla and its companies’ proposals, then the price would have to be hiked irrationally.
A former professor of the Bangladesh University of Engineering and Technology (BUET), Prof. Nurul Islam said at the hearing that the BERC should be given the power to fix the bulk gas price because BERC has been successfully fixing the price of gas and electricity since 2008.
For the development of the gas sector, the commission has formed the Gas Development Fund and the Energy Security Fund.
Prof. Nurul Islam feels that the government should make an amendment to the BERC Act 2003 and give the commission the power to fix the bulk price of gas.

BERC hints at gas price hike

Considering a possible gas price hike at the bulk level, the Bangladesh Energy Regulatory Commission (BERC) yesterday hinted at a price increase at the retail level, too. On the last day of the eight-day-long mass hearing at the BERC headquarters in Karwanbazaar, in which Petrobangla and its related organisations took part, a commission member hinted at a possible increase in gas prices. BERC member Md Maqsudul Haque said that as the prices of essential goods have increased, the price of gas might go up, too. However, he assured everyone that if the price is indeed hiked, it would be done after careful evaluation. BERC chairman AR Khan added that the price would not be hiked on the basis of speculations. The commission will consider it rationally and take a decision after calculations, he said. Replying to a query by journalists about when the price could be hiked, Khan said the commission would take a decision within the next 90 days. Petrobangla had originally proposed a 65.45 per cent hike and asked for an increase in bulk gas price from Tk. 6.29 to Tk. 10.29 per cubic metre on weighted average. In its proposal, Petrobangla had explained that since the government had imposed a fixed 55 per cent supplementary duty (SD) and value added tax (VAT) on the gas bought from international oil companies, the net price had gone up from Tk. 4.98 to Tk. 10.91 per cubic metre. Hence, Petrobangla had asked for an increase at the bulk level. Earlier, the six distribution companies of Petrobangla had asked for a 94.89 per cent price increase and had placed a proposal to hike the price of gas at the retail level from Tk. 6.10 to Tk. 11.89 per cubic metre on weighted average. Besides, the Gas Transmission Co. Ltd (GTCL) had placed a proposal to increase the gas transmission price from Tk. 0.1565 to Tk. 0.3665 per cubic meter. The technical evaluation committee (TEC) of the energy regulator, however, declined the price hike proposals of most of the companies at the hearing. The TEC observed that since most of them were making profits, they did not need to increase the prices. Prof. Dr Shamsul Alam, the energy adviser to the Consumers Association of Bangladesh (CAB), strongly opposed the price hike proposal on the last day, saying that there was no logic in the price hike on the pretext of an increase in SD and VAT. The government takes 55 per cent of the gas price while 45 per cent is taken by the companies. The companies undertook many projects that are yet to materialise. However, they want the price increased now, based on the cost of those projects, Prof. Dr Alam pointed out. He added that if BERC has to consider Petrobangla and its companies proposals, then the price would have to be hiked irrationally. A former professor of the Bangladesh University of Engineering and Technology (BUET), Prof. Nurul Islam said at the hearing that the BERC should be given the power to fix the bulk gas price because BERC has been successfully fixing the price of gas and electricity since 2008. For the development of the gas sector, the commission has formed the Gas Development Fund and the Energy Security Fund. Prof. Nurul Islam feels that the government should make an amendment to the BERC Act 2003 and give the commission the power to fix the bulk price of gas.