Although the announcement of hike in gas prices did not come too unexpectedly, the rationale for the action by the Bangladesh Energy Regulatory Commission (BERC) does not at all hold good, particularly at a time when vast majority of the people are finding it extremely difficult to have both ends meet. While price spiral of all daily essentials is shooting through the roof, the raise in gas prices demonstrates a sense of apathy on the part of the authorities, to say the least.
As per the new prices announced by the BERC, gas for a domestic single burner will cost Tk 990-- up Tk 65, and for a double-burner Tk 1,080 -- up Tk 105 from earlier rate. There are reportedly 4.3 million household gas connections of which around four hundred thousand households use pre-paid meters. The latter, for strange reasons, are to bear the brunt heavily as they will be required to pay 42.9 per cent more for each cubic meter of gas consumed. Among the commercial users, the steepest raise has occurred to fertiliser factories-- they now will have to pay Tk 16 per cubic meter instead of Tk 4.45. Except compressed natural gas (CNG) which has been spared of the hike, all commercial and industrial users will pay extra bucks-- at the expense of the ultimate consumers. The price of each cubic meter of gas for power generation by the public sector has been increased by 13 per cent, and that for the private captive power generation 16 per cent. Large industries are to pay 12 per cent more, followed by medium industries with a 10 per cent increase in the piped gas price, according to the BERC announcement. Commercial gas users such as restaurants and hotels are to experience an increase by 16 per cent, followed by the tea industry with a 12 per cent increase.
It is pretty well known that the country at the moment is experiencing food inflation of its terrible form. The gas price hike, according to experts, will not only stoke up food inflation further, but its impact will be felt in all goods and services. Although global price hike of petroleum products is a decisive factor to impinge on commodity prices all over, the authorities here should have exercised some restraint given the prevailing situation in the country.
What the BERC has to say about the raise is that this has come in keeping with the government decision not to give subsidies for any product at the production level, and that the same would be extended at the consumers' end. This logic is convoluted in that unless production cost is lowered -- through subsidies or fiscal measures -- how can the government extend benefit at the consumers' end? If one takes the case of fertiliser, the almost four-fold increase in gas tariff will leave an indelible mark on cultivation rendering all agro-products costlier-- with the burden entirely on the consumers. As for the incremental gas freight on commercial and industrial sectors, it is not known whether enough homework was done in levying the slabs. As things look like, it is utter public misery that the gas price hike is going to unleash.