Power, gas get costlier next FY

Prices of electricity and gas will become costlier from next year as per the proposed 2018-2019 budget to be placed tomorrow (Thursday).
Bangladesh Energy regulatory Commission (BERC) has already taken a move to raise gas price. BERC is set to conduct a public hearing on gas price from June 11, according to the officials of BERC.A serious 'price shock' in local energy market is coming up, an official of the Finance Ministry said.However, the government has completed a serious groundwork on it and in line with this it is going to introduce a guideline on energy pricing, formula to use Energy Security Fund and announce tax waivers in energy sector, he said.It has been apprehended that the price of LNG will be driven by international market price, which is now around $US7 to $US8 dollar per unit. 

"The price of gas will increase three times more or TK 6 to TK 19 from next year as the government will kick off the LNG import by this time from international market and as a cascade effect the price of power will go up proportionately," a BERC official said. The price will increase rationally in line with the LNG importing price, said an Energy Division official.  "Gas will be purchased at international prices when its import begins in July 2018. The current rate of taxes levied on gas, therefore, have to be rationalized. Consequently, the unit price of gas will undoubtedly increase. The gas price, however, will be adjusted by following the policy of subsidizing," Muhith told media.
According to     the BERC, the GAS Distribution Companies has already submitted their price hike proposal to them and as per rule the commission is set to conduct the hearing on gas price from June 11."As per the proposal the gas distribution companies want a hike in industry, commercial, tea garden, power, fertilizer and CNG sectors. They did not propose any hike in the household sector," the official said. Business people have already expressed serious concern over the 'price shock' in local market in future and suggested that the government should go for serious groundwork in this regard." Energy prices must be fixed in a transparent manner. The price of one energy type should not be controlled or adjusted by the price of another one," energy expert and BUET Professor Dr M Tamim told the Observer.

Integrated plans are needed to govern the sector, he said. There is no doubt over the issue that costly LNG will increase the gas price by 2.5 folds and which will raise the price up to three folds in the next 10 years. Dr M Tamim said, "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, and overall improvement in efficiency etc are likely to have direct impacts 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," he remarked.