Govt announces 32.8 percent hike in gas prices from July 1

The government has raised the price of gas by an average rate of 32.8 percent across the board to be effective from July 1 discounting opposition to the move.

Staff Correspondentbdnews24.com
Published : 30 June 2019, 11:28 AM
Updated : 30 June 2019, 06:30 PM

The price of household gas will rise to Tk 925 for a single-burner cooking stove and Tk 975 for double-burner stove from Tk 750 and Tk 800, respectively.

For customers paying for gas by the cubic metre, the price will jump to Tk 12.60 per cubic metre from Tk 9.10.

Bangladesh Energy Regulatory Commission, or BERC, announced the changes in a public notice on Sunday, hiking the prices for household gas connections without meter by 23 percent and with meter by 38 percent.

The price of compressed natural gas, or CNG, used to fuel vehicles, will also rise from Monday to Tk 43 per cubic metre from Tk 38 per cubic metre.

The 7 percent rise in CNG for vehicles will obviously affect transport fare and hurt the purse of the passengers.

BERC Chairman Monowar Islam said the price of gas at consumer levels will increase by 32.8 percent on an average to Tk 9.80 per cubic metre from Tk 7.38 per cubic metre.

BERC Chairman Monowar Islam

For production of power and fertiliser, and industries and commercial lines, the gas price hike is between 35 percent and 65 percent.

It will increase production costs and the businesses will charge the customers more to offset them.

LNG DRIVING GAS PRICES UP

The government has been making profits from selling fuel oil for the past few years due to a price slump in the international market.

This has led the government to make up for the subsidies for gas and power, which means it did not in reality subsidise the energy sector on aggregate.

But the inclusion of liquefied natural gas or LNG in the national grid has driven up cost in the sector, following which the government has readjusted gas price.

BERC Member Mizanur Rahman said 650 million cubic feet LNG is being supplied to the national grid daily and it is expected to rise to 850mcfd from July.

The average price of gas extracted from fields in Bangladesh is Tk 5 per cubic metre and that of imported LNG is Tk 35.

Mizanur said the cost of gas per cubic metre will rise to Tk 12.6 on average, but the government will charge Tk 9 from July and adjust the cost by providing subsidies.

For LNG, the government will have to spend Tk 180 billion on subsidy and 33 percent of the amount or Tk 81.6 billion will come from hiked gas prices, 29 percent or Tk 76.9 billion from government funds, and the rest Tk 24.3 billion from the Energy Security Fund, according to him.

OBJECTIONS

The Sheikh Hasina administration raised gas prices by an average of 22.7 percent for the last time in March, 2017.

It had refused the proposal to raise the prices again before the general election by the end of last year but revived the plan after winning the polls.

BERC held public hearing on Petrobangla and the distributors’ proposals on readjusting the prices from Mar 11 to 14.

Consumer rights activists, including the Consumers Association of Bangladesh or CAB, businesses, some political parties and citizen groups protested against the move to hike gas prices.

The High Court had said while hearing a writ petition filed by CAB against the gas price hike proposal that cutting corruption at Petrobangla and state-run distributor Titas by 50 percent would have ended the need for hiking the prices.

Asked what the consumers have got from the public hearing where all the quarters objected to the proposal to hike gas prices, BERC Chairman Monowar said on Sunday: “You must understand the difference between cost of energy and the cost of no energy if you want to understand the logic behind this hike.”

“The gas sector was going through a crisis. We were not able to give new connections to households and others. The crisis is going away with the import of LNG,” he said.  

“We have started a new journey. Bangladesh is in a better position if you consider the fact that even a country like Japan imports 85 percent of its energy,” the BERC chairman added.