Bangladesh raises retail power price by 5% in new year

The ongoing hearing by the BERC has apparently become unnecessary after the government announcement

Citizens are bracing for a rise in the cost of living in the new year as the government has increased weighted average power prices at the retail level by 5 percent to Tk 7.48 per unit.

The new rates are effective from the January billing, the government said in a notice on Thursday amid calls from business leaders and consumer groups not to increase the prices.

They argued a power price hike would fuel the cost of production and commodity prices, ultimately adding to inflationary pressure.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid said lifeline users will have to pay just Tk 0.19 more per unit in line with the new rate.

Now the hike is “very little” compared to a 15.43 percent jump recommended by the technical committee of the Bangladesh Energy Regulatory Commission.

“A lifeline user may need to pay only Tk 80 extra every year,” Nasrul said.

After the government notice, which mentioned the new rates at different levels, the ongoing hearing by the BERC has apparently become unnecessary.

Nasrul reiterated the government’s plan to adjust power prices every month as it does for LPG.

Power prices were raised across the board in February 2020, with retail price increased by 5.3 percent to Tk 7.13 per unit.

In the latest readjustment, the BERC initiated the hearing of distributors’ proposals to raise the retail prices after the bulk tariff was increased by 19.92 percent to Tk 6.2 per unit in November.

The regulator had said at that time the wholesale price was increased in an effort to cut back on the Tk 170 billion in subsidies for the sector. The bulk tariff hike is expected to increase Power Development Board’s annual income by Tk 80 billion.

The BERC had the powers to adjust energy prices, but the Awami League administration recently amended the ordinance to change energy prices, giving the government the powers to lower or raise the prices of electricity and fuel directly in ‘special circumstances’.

The government reintroduced rolling blackouts in July 2022 following a gas shortage fuelled by the Russia-Ukraine war. It also raised gas and fuel oil prices to save the depleted foreign currency reserves.

The power crisis hit a nadir after widespread power grid failures, but things have improved in winter when less energy is consumed for cooling.