Bangladesh raises gas price for fertiliser factories by 83 per cent

Bangladesh has increased the price of gas supplied to fertiliser factories by 83 percent per cubic metre.

In a statement on Sunday, the Bangladesh Energy Regulatory Commission (BERC) said that the price per cubic metre would rise from Tk 16 to Tk 29.25.

The new rate will take effect on Dec 1.

The revised price will apply to major gas distributors, including Titas Gas Transmission and Distribution Company Limited, Bakhrabad Gas Distribution Company Limited, Jalalabad Gas Transmission and Distribution System Limited and Karnaphuli Gas Distribution Company Limited.

According to the BERC, the decision follows a public hearing held on Oct 6 on proposals submitted by the distribution companies to raise the price for fertiliser production.

The distribution companies had petitioned to hike the gas price by 40 percent, promising to import seven more cargoes of liquefied natural gas to supply fertiliser factories.

The gas price hike will, in turn, increase the fertiliser production cost. The current production cost of a kg of fertiliser is Tk 38. The fertiliser sector receives a substantial government subsidy. Farmers buy fertiliser in the market at Tk 27 per kg.

Local production meets a fifth of Bangladesh’s fertiliser demand. The rest is fulfilled through imports. Less than a third of the demand for the most commonly used fertiliser, urea, is met locally. Urea accounts for 46 percent of the annual fertiliser consumption of about 6 million tonnes.