Don’t view energy sector from  business angle

The government’s decision to increase the fuel price is unfair to citizens as prices were not increased when global rates were high but they were raised when international prices were in decline.

According to Section 34 (1) of the BERC Act, notwithstanding anything contained in any other law for the time being in force, the price of power generation in wholesale, bulk and retail, and the supply of energy at the level of end-user, shall be determined in accordance with the policy and methodology made by the commission in consultation with the government.

CAB filed a writ petition saying that the ministry does not have the authority to increase the prices arbitrarily.

The difference is fundamental. Since there is a law in effect, the government must comply with it. But the government apparently does not obey the law. This is the reality and is a crime as well, when the ministry sets the price, it leaves no scope for the public to give their input. When the hike is done through the BERC, however, the commission has to listen to stakeholders and arrange a public hearing before setting the prices -- a practice that was followed recently for adjusting gas prices.

He also questioned the role of the Bangladesh Energy Regulatory Commission (BERC). While acknowledging that BERC has the authority to set prices through public hearings, he noted it lacks the capacity to exert this authority. He mentioned that LPG owners would increase prices at will, prompting a court case where it was successfully argued that only BERC could legally raise prices through a public hearing process.

He highlighted significant potential savings. According to him, importing the total amount of furnace oil through BPC instead of the private sector would save around Tk 80 billion. Additionally, maintaining duty and tax exemptions on furnace oil imports could save around Tk 90 billion. He pointed to a BERC-determined profit margin of 4.18 per cent in power generation that could lead to further savings if followed. Professor Alam argued that import costs for fuel oil automatically increase taxes, duties, VAT, and BPC profits, with no consideration from BPC or the energy division to control these costs to ensure a fair price for consumers. He stated this neglect of public interest contradicts the government’s public welfare principles.

He traced the roots of the problem to the 2016 energy master plan, which adopted an import-dependent policy. He argued that since master plans have no legal binding and can be drawn up at will without public commitment, there is no reason to adhere to them. He noted the 2016 plan is being expanded in 2022, continuing a lineage from a 2010 plan, but that key elements like competition, cost, and fuel supply were never implemented.