Post-Eid BERC public hearing on plans to hike gas prices

Petrobangla is going to propose a massive hike in gas prices at all consumer levels.

The proposal sent by the Ministry of Power, Energy and Mineral Resources recommends raising the prices by 5 percent to 122 percent.

Chairman of Bangladesh Oil, Gas and Mineral Corporation, known as Petrobangla, Hossain Monsur said the proposal will be sent to the Bangladesh Energy Regulatory Commission (BERC) after Eid-ul-Azha.

BERC will hold a public hearing and then give a final decision on the proposal, he said.

But Monsur did not specify any date for sending the price hike proposal to the energy regulator.

The Eid vacations will end on Oct 8.

Monsur on Tuesday told bdnews24.com: "We wrote to the ministry asking whether the gas prices will have to be raised. The ministry with some directions has proposed to hike the prices."

The ministry has proposed the highest price hike, by 122.22 percent, on domestic use - from Tk 450 a month for two stoves to Tk 1,000. For single burner gas cooker, the proposed hike is from Tk 400 a month to Tk 850, a little over 112 percent.

It also proposed to raise the price of 1000 cubic feet gas in domestic gas lines by 60.68 percent, Tk 235 from Tk 146.25.

The Petrobangla chief said, "Gas prices in our country are lower compared to other countries. The gas distribution companies in our country are suffering loses due to this. That's why we must increase the prices."

Defending the proposed increase in the rent for domestic gas lines, he said, "Gas price needs to be rationalised since rural customers buy gas cylinders at four times the rent paid by urban customers."

The second highest hike has been proposed for captive power (private industrial power plants) by 102.94 percent to Tk 240 for a thousand cubic feet of gas.

A 33 percent increase has been proposed for the price of CNG, raising the price of each thousand CFT to Tk 1132.67, 32.6 percent increase for industrial use, raising it to Tk 220, 350 commercial gas by 30.55 percent to Tk 350, for fertilisers 9.71 percent to Tk 80, gas for power generation by 5.24 percent to Tk 84 and the tea-garden supply by 20.55 percent to Tk 200.

Last time gas prices were revised was in August 2009 during the past Awami League government. All retail prices apart from brick kilns and CNG were raised.

Asked what impact this might have on the economy, economist Zayed Bakht said, “The price has not been raised in a while. I think the government wants to bring balance.”

“But it would have been better if they raised it gradually. The sudden rise will affect the price levels.”

He said he believed the decision was taken since inflation was at a tolerable level at present.