Further gas tariff hike on cards

Bangladesh Energy Regulatory Commission (BERC) has endorsed the Energy Ministry's plea to increase energy price (gas) soon.
"We agree with the Energy Division's submission to rationalize the price of gas soon. However, we asked them to submit fresh proposal to the commission as per rule," a BERC official told the daily Observer on Monday following a meeting with the Energy Division officials.
Energy Division Secretary Nizamuddin Ahmed and Petrobangla Chairman Abul Mansur Md Faizullah submitted the proposal to the BERC Chairman Monwar Hossain on Monday. Members of the commission were present there.
The government is planning to raise gas tariff once again to adjust the price to costly import of liquefied natural gas (LNG) due from this fiscal year. The cost will double after the government starts importing LNG through Indian Reliance and Petronet from 2021, officials said.
The first consignment of LNG will reach Maheshkhali on April 26. Sources said the LNG price is up in the international market and the price of per thousand cubic feet is more than eight dollars that means that the government will have to spend more than 1.5 billion dollars annually for importing 1.87 million tonnes of gas. At the year end, Petrobangla will start importing another 250mmcf LNG per day.
Petrobangla and the Energy Division said the gas prices will go up by at least 100 per cent with the injection of the imported LNG to the national grid, and the government will have to give subsidy of billions of dollars to keep it under the reach of the mass.  
Under this circumstances, the Energy Division sought support from BERC in rationalizing the gas tariff to the high cost of LNG as the government need around Tk 14,000-Tk 15,000 crore for importing 1000mmcfd of LNG from the current fiscal year.
"Fixing the energy prices in Bangladesh will get tougher in the future. Many factors including international market, subsidy, the usage pattern of energy resources, loan policy, overall improvement in efficiency etc likely has a direct impact on adjusting the price. So, predicting the price of the energy might appear as a challenging task for everyone. However, the price predictability is extremely important for Industries, especially for electricity," BERC official said.
 "The energy division has presented a paper to the commission where it depict a clear scenario of fuel import and cost of it, it also presents its future plan to the commission to ensure energy supply to the national grid," the official said.
Petrobangla urged its bulk consumers including BPDB and BCIC to manage enough funds for a considerable hike in gas prices, the average cost of per unit of gas is Tk 7.34, but it will be Tk 13 per unit after the imported gas arrives.
The demand for natural gas in the country has been estimated at 3781mmcfd in 2017-18 fiscal against the supply 2745.8 mmcfd.
The government last increased the gas price on February 22, last year, in two phases. The first phase came into effect in March 2017 when the charge for a single burner stove was increased to Tk 750 from Tk 600 and for double burner stove to Tk 800 from Tk 650.
The second phase was supposed to come into effect from June the same year and the monthly charge for a single burner stove was fixed at Tk 900 and double burner stove at Tk 950. The second phase hike could not be implemented because of a High Court order.