The Bangladesh Energy Regulatory Commission (BERC) is set to announce an increase in electricity prices both wholesale and retail levels this week, however, the new electricity tariffs may come into effect from June 1.
Electricity consumers may face an 8 to 11 per cent increase in retail tariffs in addition to any rise in wholesale electricity and transmission charges, according to the Bangladesh Energy Regulatory Commission's (BERC) Technical Evaluation Committee.
The last time electricity prices were increased was by an executive order on February 29, 2024. In that order, the average wholesale electricity price was increased from Tk 6.70 to Tk 7.04. However, BPDB claims that the average selling price has stood at Tk 6.99 due to differences in company-based sales.
Earlier, six power distributing agencies including Bangladesh Power Development Board (BPDB), Rural Electrification Board (REB) and its 80 rural cooperatives, Dhaka Power Distribution
Company (DPDC), Dhaka Electric Supply Company (DESCO), West Zone Power Distribution Company (WZPDCO) and Northern Electricity Supply Company (NESCO) sought retail tariff hikes ranging from Tk 0.85 to Tk 2.05 per unit.
BERC Chairman Jalal Ahmed said that the order will be issued soon. The work is underway to determine the price, and it is not possible to say a specific amount right now, he added.
Public hearings were held on the proposal to increase electricity prices on May 20 and 21.
BERC Technical Evaluation Committee did not make any recommendation on the proposal of withdrawing slabs, however, if the slab benefit is removed, it said, a consumer who currently pays Tk 415 for 76 units would have to pay Tk 574, an increase of about 38 percent.
The committee found that in fiscal 2025-26, six power distribution utilities would require Tk 11,925 crore more to run their operations than the expenditure allowed under the existing 2024 tariff structure.
Currently, consumers using up to 200 units receive the lower tariff for the first 75 units.
Under the proposal, consumers using between 76 and 200 units would pay the higher applicable rate for their entire consumption.
The BERC Technical Evaluation Committee raised objections to several proposals, warning that abrupt customer reclassification and indiscriminate commercial categorisation of hospitals and educational institutions could have negative social impacts. The committee also recommended conducting a regulatory impact assessment before implementing major structural changes.
However, industrial entrepreneurs strongly opposed the proposals, arguing that manufacturers are already struggling with gas shortages, unstable electricity supply, rising raw material costs and pressure from the dollar exchange rate. They warned that fresh tariff hikes would sharply increase production costs and weaken the competitiveness of Bangladeshi products in export markets.
CAB said the burden of inefficiency, system losses, delayed projects, excessive spending and capacity charges in the power sector should not be imposed on ordinary consumers. It added that stronger governance and accountability measures are needed. The organisation cautioned that higher electricity prices would increase operational costs for industry, agriculture, transport and small businesses, leading to higher commodity prices and negatively affecting consumers.
According to BPDB data, the average cost of electricity generation in the 2019-20 fiscal year was 2.13 taka, 3.16 taka in the 2020-21 fiscal year and 8.5 taka in 2022, now the average cost of generation is around 13 taka. The increase in fuel prices and the rise in the value of the dollar are cited as the reasons. However, those concerned have been blaming various corruption, irregularities, unfair contracts and mismanagement.
To curb losses, DESCO has proposed an increase of 9.67 percent, DPDC 6.96 percent, Ojopadiko 10 per cent, REB 5.93 percent, while NESCO has proposed an increase of 3 paisa per unit and BPDB 29 paisa.
In addition, the companies have requested a price increase in line with the increase in wholesale price and transmission charges. The sole electricity transmission company, PGCB (Power Grid Bangladesh PLC), has proposed to increase the price per unit from 30 and 31 paisa to 48 and 49 paisa, respectively.
Dhaka Electricity Supply PLC (DESCO) has proposed that the wholesale price has been increased by 36.98 percent from December 2022 to February 2024. Dhaka Power Distribution Company (DPDC) said in its proposal that the wholesale price has not increased at the same rate as the retail price. To address its losses, it is necessary to increase prices by 6.96 percent.
The Rural Electrification Board (REB) said in its proposal that 80 rural electricity associations have incurred a net loss of Tk 1,698 crore in the fiscal year 2024-25. To prevent losses, prices need to be increased by 5.93 percent. If the wholesale price increases, the REB has requested that that amount be added to the 5.93 percent.
In other words, it is almost certain that prices are increasing at the retail (consumer) level. However, BERC sources said that although the distribution companies have requested some changes in the step system, it is unlikely to be effective this time.
