Bangladesh hikes retail power prices by 5% for February

Prices at the wholesale level will also see an 8.06 percent increase in February

The government has raised the prices of power at both the wholesale and retail levels as Bangladesh grapples with the prospect of an intensifying cost of living crisis.

Retail prices have gone up 5 percent for the second time in a month, while wholesale prices are seeing an increase of 8.06 percent, according to a notice issued on Tuesday.

The new rates will be effective from the February billing.

Based on the notice, the weighted average power prices at the retail level are set to rise to Tk 7.85 per unit next month.

The development comes a day after parliament codified a new law which provides discretionary powers to the government to change electricity and energy prices whenever necessary.

Prior to the enactment of the law, only the Energy Regulatory Commission, or BERC, had the power to adjust energy prices after consulting stakeholders at public hearings.

But the government felt the necessity to amend the law after its bid to raise fuel prices in August last year was challenged in the higher courts.

Addressing the possibility of increasing power prices on Monday, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said, "We have already said that if we want to cut back on subsidies, we have to increase prices.

"We will adjust the prices of gas and electricity every month if necessary to keep in step with the international market. In that case, if the price decreases in the international market, it will also drop here."

Previously, power prices at the retail level were raised by 5 percent on Jan 12 despite opposition from business leaders and consumer groups.

Meanwhile, bulk power prices last saw an increase of 19.92 percent in November as part of the government's efforts to scale back the hefty subsidies to the sector amid a global energy crisis fuelled by the war in Ukraine.

Before that, power prices were raised across the board in February 2020, with retail prices rising 5.3 percent to Tk 7.13 per unit.

“For the month of February, retail prices for various categories have been increased. The average retail price will rise 5 percent," said Habibur Rahman, secretary of the Power Division.

"Wholesale prices for 230 KV lines, 132 KV lines and 33 KV lines have also been revised. The average price has increased by 8.06 percent."

RETAIL PRICES

The energy rates for different customer categories have been adjusted based on the pressure on the electricity supply, which ranges from low to medium and high to ultra-high. Additionally, customers must pay the demand rate for each type of connection along with 5 percent VAT on the total bill.

The government raised the demand charge at the retail level by Tk 10 to Tk 15 in January and will leave it unchanged next month.

The new rates will be applicable to residential, irrigation or agricultural pumps, small-scale industries, construction, education, religious and charitable institutions and hospitals, battery charging stations, and commercial, office and industrial users.

The minimum price of power per unit for lifeline users has been set at Tk 4.14, up from Tk 3.94 in January. Meanwhile, the maximum rate, applying to temporary commercial or office consumption, will rise by Tk 0.84 to Tk 17.64

Pumps used for irrigation or agricultural work will be charged Tk 4.59 for electricity, up Tk 0.12.

The flat rate for small-scale industries is Tk 9.41, which was Tk 8.96 in January. The off-peak rate has been fixed at Tk 8.46, while the peak hour rate will climb from Tk 10.75 to Tk 11.29.

The flat rate for commercial and office spaces has been set at Tk 11.36, compared to Tk 10.82 in January, the off-peak rate at Tk 10.22 and the peak rate will jump from Tk 12. 98 to Tk 13.63 next month.

Besides, these categories of consumers in medium, high and ultra-high pressure will have to pay more per unit. High-pressure industrial users will have to pay an increased flat rate of Tk 9.31, an off-peak rate of Tk 8.39 and a peak hour rate of Tk 11.64.

WHOLESALE PRICES

The Bangladesh Power Development Board will sell electricity to distribution companies at an average rate of Tk 6.70 per unit in February, compared to Tk 6.20 in January.

Separate tariffs have been fixed for the 230 KV, 132 KV and 33 KV lines of the six distribution companies.

According to the new wholesale price schedule, the rate for DESCO's 33 KV line, which supplies electricity to urban areas, has been fixed at a maximum of Tk 8.24 per unit, which was Tk 7.74 in January.

And, the rate for DPDC's 33 KV line has been set at Tk 8.22 per unit, up from Tk 7.72.

The Bangladesh Rural Electrification Board has fixed the price of power for 33 KV lines at Tk 5.90 per unit, which is the lowest price for wholesale electricity. The previous rate was Tk 5.39.