Electricity prices hiked across the board

Retail and bulk consumers of electricity have to pay 16.68-percent and 19.85-percent higher tariffs respectively as the government again gives an across-the-board raise in power prices, stoking concern about its cascading impact.

Bangladesh Energy Regulatory Commission (BERC) chairman Jalal Ahmed announced Wednesday the new power tariffs at a press conference at its office, with retrospective effect from June 1.

As per the new decision, the weighted average bulk tariff of electricity has been raised by Tk 1.39 per unit (1 kilowatt-hour) to Tk 8.39 from previous Tk 7.0 a unit, while the retail power tariffs have gone up by Tk 1.52 to Tk 10.63 per unit from the previous rate of Tk 9.11.

"The commission has adjusted upwardly the power tariffs considering rising costs of electricity generation, purchase, capacity payments of idled power plants, imports, as well as transmission and distribution expenses and the country's overall financial situation," says the BERC chairman about the hikers.

Notwithstanding the hike in bulk power tariffs, the government will have to provide around Tk 410 billion as subsidy annually to cover the deficit incurred by the state-run Bangladesh Power Development Board (BPDB), he adds.

Despite the tariff hikes, the demand charge for all types of consumers will remain unchanged, the BERC chairman told the press.

All types of consumers, including residential, agricultural, industrial, commercial institutions, educational institutions, hospitals, irrigation, and electric vehicle- charging stations, will have to pay higher tariffs under the newly announced rates.

Residential customers will witness electricity prices increase within the range from Tk 0.69 to Tk 2.74 per unit, depending on their usages.

In percentage terms, prices across different categories have risen by about 15 to 20 percent.

The commission also raises electricity-transmission charge to Tk 0.38 per unit from Tk 0.31 per unit

For lifeline or marginal residential customers (0-50 units), the new power tariff is Tk 5.32 per unit, which is Tk 0.69 paisa or 14.90-percent higher than previous Tk 4.63 per unit.

The overall cost from power tariff of lifeline consumers will increase by Tk 34.50 per month in maximum with the hike.

For the consumers using 0-75 units, the new tariff is Tk 6.18 per unit, which is Tk 0.92 or 17.49 per cent higher than previous Tk 5.26 per unit.

The overall cost from power tariffs for this type of consumers will increase by Tk 69 per month at the maximum with the hike.

The consumers who will be using 76-200 units, the new tariff is Tk 8.50 per unit, up by Tk 1.03 from previous Tk 7.20 per unit.

The overall cost from power tariff for this type of consumers will increase by Tk 206 per month in maximum with the hike.

For the consumers using 201-300 units, the new rate is Tk 9.10 paisa, an increase of Tk 1.51 per unit from previous Tk 7.59 per unit.

This type of consumers will have to count an additional cost of Tk 453 per month in maximum with the hike.

The consumers who will be using 301-400 units, the new tariff is Tk 9.62 per unit, up by Tk 1.60 from previous Tk 8.02 per unit.

The overall cost from power tariff for this type of consumers will increase by Tk 640 per month in maximum with the hike.

For the consumers using 401-600 units, the new rate is Tk 15.01 per unit, an increase of Tk 2.34 per unit from previous Tk 12.67 per unit.

This type of consumers will have to count an additional cost of Tk 1,404 per month in maximum with the hike.

The consumers who will be using above 600 units, the new tariff is Tk 17.35 per unit, up by Tk 2.74 from previous Tk 14.61, and they will have to count additional cost as per their usages.

For agricultural irrigation, the new power tariff has been set at Tk 6.04 per unit, reflecting an increase of Tk 0.79 or 15.4 per cent. For small industries, the flat rate is now Tk 12.73 per unit, up by Tk 1.97.

For educational institutions, places of worship and hospitals, the new rate is Tk 9.05 per unit, an increase of Tk 1.50 per unit.

Electricity used for street lights and water pumps is set at Tk 11.46 per unit.

Similarly, electric vehicle-charging stations will now pay Tk 11.36 per unit, which is Tk 1.74 higher than previous price.

For commercial and office customers, the new rate is Tk 15.36 per unit, in an increase by Tk 2.35 per unit.

The industrial consumers who will use 33 kilovolt (kV), the new rate is Tk 12.75 per unit, while for 132-230kV industrial customers, it is Tk 12.66 per unit.

In both cases, the price has been increased by Tk 2.0 per unit.

The BERC earlier had held a two-day public hearing on power-tariff-hike proposals submitted by the state-run Bangladesh Power Development Board and other state-owned distribution utilities, including West Zone Power Distribution Company Ltd, Dhaka Power Distribution Company Ltd, Dhaka Electric Supply Company Ltd and the Rural Electrification Board, on May 20 and May 21.

The BPDB and its subsidiary companies sought increases in retail electricity tariffs ranging from 15 per cent to 29 per cent for different categories of consumers, including households, irrigation pumps, the construction sector, educational institutions, hospitals, commercial establishments, industries and battery-charging stations.

In their proposals, the BPDB and other power distribution-and marketing companies also sought an increase in bulk electricity prices to help address a projected deficit of Tk 655 billion in FY 2026-27.

The most recent electricity-tariff increase took place on February 29, 2024 by an executive order, when the wholesale tariff was raised by 5.0 per cent from Tk 6.70 to Tk 6.99 per unit, while retail tariffs increased by an average of 8.5 per cent.

Before that, BERC revised the bulk electricity tariffs on November 21, 2022, raising the rates by 19.92 per cent to Tk 6.20 per unit following a public hearing.

UNB adds: The Consumers Association of Bangladesh (CAB) expressed concern over the latest increase in electricity tariff, warning that the move could intensify inflationary pressures and raise the cost of living for ordinary people while increasing production costs across key sectors of the economy.

Reacting to the price hike, CAB Vice President SM Nazer Hossain said energy, including electricity and gas, is a fundamental driver of economic activity, and any increase in energy prices inevitably has widespread consequences.

"We have repeatedly said that electricity, gas and other forms of energy are the backbone of the economy. When energy prices increase, economic activities are naturally affected. The impact is felt not only in households but also in industries, agriculture, transport and other productive sectors," he said.

According to the CAB, higher energy costs increase production expenses, which are ultimately passed on to consumers, affecting people from all walks of life and potentially fuelling inflation.

It said the tariff increase comes shortly after the new government assumed office, sending negative signal to consumers as well as those involved in industry, trade and commerce.

The CAB also criticised the process through which the electricity tariff was raised, noting that CAB and other stakeholders had repeatedly urged the authorities to address inefficiencies, irregularities, corruption, system losses and capacity charge-related issues before imposing additional burdens on consumers.

"Instead of taking effective measures to resolve these long-standing problems, the burden has once again been shifted onto small and marginal consumers. This is very unfortunate," Nazer said.

He argued that while many countries are considering subsidies or bill relief for low-income consumers, reducing subsidies and increasing tariffs for small users is difficult to justify.

The CAB leader also expressed concern over the lack of visible progress in promoting renewable energy, despite a global shift towards cleaner energy sources. "Across the world, governments are prioritising renewable energy. We have yet to see comparable initiatives here. This could create long-term challenges for the economy."

He further pointed to what he termed a significant disparity in electricity distribution between urban and rural areas, saying persistent power shortages in many rural regions are creating frustration among residents.

Although the Bangladesh Rural Electrification Board is responsible for distributing around 80 percent of the country's electricity, the CAB alleged that mismanagement, irregularities and capacity constraints are hampering the government's goal of ensuring universal access to electricity.

The CAB called for urgent measures to address these issues and improve the overall efficiency and reliability of the power sector.

Azizjst@yahoo.com