More price hike on cards

Piped natural gas may get even costlier as the government, apparently desperate to increase supply of the fossil fuel by importing costly LNG and LPG.
During the hearing of gas price hike at Bangladesh Energy Regulatory Commission (BERC) the then, Petrobangla Chairman Istiaque Ahmed categorically said that they need to hike the tariff of gas for importing LNG, as the government would require around US$1.56 billion a year for importing 500mmcfd of LNG at a rate of $8 per mmcfd.
Finance Minister AMA Muhith in his budget proposal also laid emphasis on LNG import to increase gas supply to the industrial units. Pointing fingers on the present natural gas production scenario he said currently Petrobangla produces around 2,700 million cubic feet per day (mmcfd) against the demand of around 3,300 mmcfd, the prevailing gas crisis will intensify in the days to come due to the expansion in power, industries, CNG and other sectors.    
Yes, it is a fact that the government needs to import LNG or LPG from abroad to meeting the growing demand of the energy sector but a million dollar question is can we ensure a level playing field for all especially the urban and rural consumers in the country in the event of a gas price hike?
"Since LPG is fully import oriented, single energy dependence rather than primary fuel mix can't fully meet the growing and scattered needs of gas. The urban and rural uniform price delivery backed by subsidy and rebuilding supply chain network across the country are key challenges to ensure LPG popularity alongside encouraging other energy mix without further tariff change. Considering the lower income capacity of majority population, 70 per cent belonged to lower income group, industrial boom, transport network, dependence on the pricy LPG cannot be solely affordable and sustained way-out of primary energy crisis in long run towards inclusive economic development of Bangladesh,"  DCCI Research fellow AKM Asaduzzaman Patwary  said.
The question is not only to ensure the access of energy for all consumers, it linked with the justification of price hiking, however, the Technical Evaluation Committee (TEC) of BERC on the public hearing rejected the proposal of several Gas Distribution Company Ltd (BGDCL) to hike the gas price, saying the company does not need to increase its distribution charge.
 The Bangladesh Energy Regulatory Commission evaluation body, headed by AKM Monowar Hossain Akanda, found no justification of many proposals for the price hike.
"We are defeated, we people are paying 81 per cent tax and duties in energy sector, we are paying money to establish a strong fund titled "Gas Development Fund" and "Energy Security Fund" to do all upstream and downstream business of the state-owned agencies every month, we are unfortunate," Dr Samsul Alam told the Daily Observer.
He said, "Just to ensure huge profit margin in LPG business, the government hike the gas price although around Tk 5,000 crore fund is available and thousand crores of taka FDR liquid money lies in the distribution companies funds," he added.
Domestic use of gas is always alleged to be more expensive than other form of use. The double burner domestic use consumes 4,000 mcf at the price of Tk 650 which is Tk .3700 in market price considering the imported LNG price. A four-member family requires minimum of two 12 Kg LPG cylinders costing Tk 1,250. But the pipe gas let unlimited gas consumption for lower price.
The government is struggling to balance among diverse sectoral needs as demand from diverse stakeholders is mounting. Arguments for more gas allocation from various stakeholders are apparently rational. Against this backdrop, policy leaders, consumers group and stakeholders and energy experts are negotiating for the roadmap to address the rational use and allocation of limited gas with priorities. Of the few energy alternative sources, the most discussed are LPG and imported LNG to meet crucial needs. Against this backdrop, recent initiative of gas price hike for domestic pipe gas to equalize the LPG and realise fund for meeting cost of escalating gas demand, Energy and Mineral Resources Division said.
Petrobangla argues for doubling gas tariff of domestic consumers in order to establish parity among the pipe gas users, non-users and reduce waste of gas whereas there is no remarkable move in liquid energy price reconciliation for multiple benefits for all stakeholders. Is LPG a sustainable solution? Crisis-stricken state of energy supply encountered by the cross section of business community, business demand for LPG demands nearly 1 million tonnes a year which is on rise.
"The government has shut most of the fertiliser factories to cope with the gas supply shortfall. The government has also been maintaining a rationing system in the gas supply to industries, CNG stations, power stations since 2009. Even it failed to tell the consumers that they do not need to install captive plant at their factories that hinted us that crisis will continue as the demand is growing," Professor Anu Muhammad said.
Under the circumstances, the government has decided in principle to establish the gas bottling plants to increase the usage of LPG in households, automobiles and small industries, and also as raw material for chemical and processing industries.
The proposal for gas tariff hike came along with a proposal seeking approval for setting up a LNG terminal at Moheshkhali with re-gasification capacity of 500mmcfd per day from imported LNG. It also signed 5 MoUs with different companies to import LNG or LNG fired power plant in the country.
Demand for LPG in Bangladesh has seen strong growth in 2016 owing to the increasing suspension of natural gas connections and growth in the use of LPG as an auto fuel.
LPG consumption in 2015 stood at 200,000 mt. Demand is estimated to rise to 300,000 mt/year, but MPEMR estimates that actual demand could be around 500,000 mt/year, with consumers using kerosene and wood as alternatives to LPG due to lack of availability
LPG is available only in cities and their adjacent areas in the country, he said, adding that with the start of operation of new firms, LPG will reach the rural areas.
"Petrobangla would adjust the natural gas tariff for mobilising funds for LNG import," according to EMRD note proposal. That indicates that we are entering in a volatile marked based energy marked and to be ready to pay the price.