Gas prices to go up as LNG import starts next month

The Energy Division wants to raise the prices of natural gas by 200 per cent in power and fertiliser sectors to adjust high import costs of Liquefied Natural Gas (LNG) scheduled to begin this year.
It also suggested raising the gas price up to 100 per cent for other categories items that are the bulk consumers of natural gas, according to the Energy Division.
"The Energy Division has drafted a proposal to raise the prices of natural gas by up to 200 per cent and 100 per cent just to adjust high import costs of Liquefied Natural Gas," sources told The Daily Observer on Saturday.
Gas could become costlier in 2018 by as much as 60 per cent compared to the present prices, when imported liquefied natural gas (LNG) will be injected into the national gas gridline, industry insider said.
"The government recently decided to blend 1,000 million cubic feet (MMCF) of imported LNG with natural gas to raise supplies in the wake of dwindling local production and rising demand.       For this, the average cost per unit of gas is Tk 7.50 with all taxes and value added tax (VAT)," said Professor Dr Samsul Alam.
The government plans to increase gas supplies by 500 million cubic feet per day from April and another 500 mcfpd from October this year with imported LNG as the US company Excelerate Energy and local energy conglomerate Summit LNG Terminal Company will set up two floating terminals and LNG re-gasification units near Moheshkhali Island.
The gas distribution companies, subsidiaries of Petrobangla, will submit the proposal for raising gas prices to the Bangladesh Energy Regulatory Commission once the government begins LNG import from April 2018, he added.
It suggested the gas distributing companies to submit a proposal to the Petrobangla in this line thus it could be able to submit the gas price hike proposal to the Bangladesh energy Regulatory Commission (BERC) by this week, the official added.
'We will finalise the proposal after examining the potential impacts of gas price hike on the country's economy,' another senior official said. He said they will hold talks with all the major consumers of natural gas before finalising the price hike proposal.
To make the issue doable, the Energy Division has conducted several meetings in the last couple of weeks.
Among the other categories, Petrobangla wants to raise gas prices for domestic burners, CNG driven vehicles, for commercial uses and for tea estates by 100 per cent, sources said.
Petrobangla has taken the move to raise gas prices one year after the Energy Commission raised the gas prices by 22.7 per cent on an average in two phases, one from March 1 and the other from June 1, 2017.