Hasina says industries must pay for uninterrupted supply as govt explains gas price hike

The government explains a nearly threefold rise its decision to raise gas prices for industries

Parliament CorrespondentSenior Correspondentbdnews24.com
Published : 18 Jan 2023, 05:55 PM
Updated : 18 Jan 2023, 05:55 PM

Sheikh Hasina has defended the decision to discontinue subsidies for the energy sector, saying industries must pay in full for gas if they want uninterrupted supply.

The prime minister made the remarks in parliament on Wednesday as the government explained why it raised gas prices by three times for industries.

If the industrialists want uninterrupted supply, they must pay the price at which the government is buying gas, she said. “There’s no justification in giving subsidies.”

She was discussing the issue after Jatiya Party MP Muzibul Haque Chunnu asked how the government would tackle the inflationary pressure after the hike in power and gas prices “to fulfil conditions set by the International Monetary Fund for loans worth $4.5 billion”.

Hasina said the IMF did not set any such conditions for the loan. “The IMF gives loans only when a country has the ability to repay.”

She then questioned subsidies for gas and power. “No other country gives subsidies for gas and power.”


The prime minister said the UK increased power prices by 150 percent due to the global crisis amid the Russia-Ukraine war while retail power prices increased in Bangladesh by 5 percent.

She said the price of LNG on the spot market increased to $68 per MMBtu from $6 due to the global crisis. “How much subsidy will the government provide?”

“And subsidies are actually people’s money. If prices are kept low with subsidies, the rich get the advantage.”

Hasina said her government took steps to help the poor cope up with rising inflation by subsidising food and agriculture.

‘LNG IMPORT COST BEHIND GAS PRICE HIKE’

The government on Wednesday increased the prices of natural gas for industrial units and power producers for the second time in just over six months.

The gas price for industrial units of all sizes has been set at a flat rate of Tk 30 per cubic metre, the government said on Wednesday. Previously, large industrial units had to pay Tk 11.98, medium units Tk 11.78 and small industries Tk 10.78.

The price of gas supply to power plants has been raised by about Tk 9 to Tk 14 a unit.

In a statement, the Energy and Mineral Resources Division said the government decided to increase gas prices because it will need to buy LNG from the spot market at a high price.

Energy prices have skyrocketed due to instability in the international market amid the Russia-Ukraine war. Other costs, such as insurance and dollar price, have also fuelled energy prices, the agency said.

As the subsidies for LNG imports increased abnormally, the government stopped buying LNG from the spot market in July 2022, forcing the authorities to ration gas for industries and power producers.

In this situation, the government took opinions from the stakeholders in the sectors in order to ensure supply during the irrigation season, upcoming Ramadan and summer.

“As the government will have to import LNG from the spot market at a high price to meet the increased demand, it has decided to increase gas prices for power, industries, captive power and commercial connections.”

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