Another hike in gas price?

If the hike is considered essential it must be perfectly aligned with the customers’ affordability, reserves and production costs

With less than a year, another hike in the existing gas price is likely to take place from next month. Quoting the sources of Bangladesh Energy Regulatory Commission (BERC), a report of this newspaper said the hike would be around 20 percent for consumers of all levels. The energy regulatory body is reported to have finalised all formalities and paperwork in this regard before the final go-ahead coming from the (PMO) Prime Minister’s Office. However, the point is: if the hike is considered essential it must be perfectly aligned with the customers’ affordability, reserves and production costs. The BERC decision, in light of a public hearing some three months ago, clearly seeks increase in the prices of gas used from the domestic to the overall industrial sector. 
Though the BERC chief has reportedly stated to have decided to go for the hike based on ‘logic and close examination’ by keeping the rise at a minimum level , but decision making in such crucial matter should always include the stake holders meaning, the consumers, experts and academics. Prior consultation always yields better results and mutual benefits for both producer and the consumer, especially when adjustment of natural gas is subject to the price fall of crude oil price in the world market besides existing reserves. Moreover, recently it has triggered a widespread debate in Bangladesh. The price adjustment may have some logic but the country’s finite gas reserves are fast depleting. Also regular price hikes every year is likely to put pressure on consumers of all level, so opportunities for exploring alternate fuel should be quickly prioritised. According to our experts, going at the current rate of average consumption the proven gas reserve may start a sharp decline by as early as 2018. 
The fact is since 2002 our gas sector is passing through a grave uncertainty. In tuned with our experts, we also believe the calculation of gas price fixing method should be more realistic for calculating the price at the bulk level, both for now and the future.  The first upstream gas price should be fixed before moving to the consumer level.     
After enforcing a substantial hike in September 2015 and parroting over the same old fact that ‘the gas price is still too low in Bangladesh’, the BERC should, in fact, explain why it has decided to increase the price on back-to-back years. Last but not least, the BERC must also take in stock that the upward adjustment of retail prices, as experienced in recent years, should not be the only means of reducing its subsidies.

 

Another hike in gas price?

If the hike is considered essential it must be perfectly aligned with the customers affordability, reserves and production costs

With less than a year, another hike in the existing gas price is likely to take place from next month. Quoting the sources of Bangladesh Energy Regulatory Commission (BERC), a report of this newspaper said the hike would be around 20 percent for consumers of all levels. The energy regulatory body is reported to have finalised all formalities and paperwork in this regard before the final go-ahead coming from the (PMO) Prime Ministers Office. However, the point is: if the hike is considered essential it must be perfectly aligned with the customers affordability, reserves and production costs. The BERC decision, in light of a public hearing some three months ago, clearly seeks increase in the prices of gas used from the domestic to the overall industrial sector. Though the BERC chief has reportedly stated to have decided to go for the hike based on logic and close examination by keeping the rise at a minimum level , but decision making in such crucial matter should always include the stake holders meaning, the consumers, experts and academics. Prior consultation always yields better results and mutual benefits for both producer and the consumer, especially when adjustment of natural gas is subject to the price fall of crude oil price in the world market besides existing reserves. Moreover, recently it has triggered a widespread debate in Bangladesh. The price adjustment may have some logic but the countrys finite gas reserves are fast depleting. Also regular price hikes every year is likely to put pressure on consumers of all level, so opportunities for exploring alternate fuel should be quickly prioritised. According to our experts, going at the current rate of average consumption the proven gas reserve may start a sharp decline by as early as 2018. The fact is since 2002 our gas sector is passing through a grave uncertainty. In tuned with our experts, we also believe the calculation of gas price fixing method should be more realistic for calculating the price at the bulk level, both for now and the future. The first upstream gas price should be fixed before moving to the consumer level. After enforcing a substantial hike in September 2015 and parroting over the same old fact that the gas price is still too low in Bangladesh, the BERC should, in fact, explain why it has decided to increase the price on back-to-back years. Last but not least, the BERC must also take in stock that the upward adjustment of retail prices, as experienced in recent years, should not be the only means of reducing its subsidies.