BERC starts public hearing on gas price hike

The public hearing on the proposals for raising gas prices started at the Bangladesh Energy Regulatory Commission (BERC) in Dhaka on Monday.

On the first day of the hearing held at TCB Auditorium, the body heard the appeal of state-owned Gas Transmission Company Limited (GTCL) which sought a hike in its transmission charge by 68.65 per cent to Tk 0.4476 per cubic metre (CM) from the existing Tk 0.2654.

To justify the GTCL's plea, Petrobangla chairman Abul Mansur Md Faizullah said they have undertaken a number of gas transmission projects to facilitate the supply of imported LNG (liquefied natural gas) which will push up their transmission cost. GTCL is a subsidiary body of Petrobangla.

GTCL managing director Atiquzzaman in a written presentation said the company had to borrow huge money from foreign sources to implement new projects for LNG and now it has to spend Tk 8.52 billion annually for debt servicing.

"If the transmission charge is not raised, the company will face liquidity crisis in debt servicing," he said.

A BERC technical committee disagreed with the GTCL appeal and recommended that the transmission charge could be raised at best by Tk 0.1027 per CM to offset its revenue deficit to be created due to new project implementation.

However, the BERC five-member commission, headed by its chairman, will take the final decision on the appeal of the GTCL, reports UNB.

Participating in the hearing, adviser to Consumers Association of Bangladesh (CAB) Prof M Shamsul Alam raised a volley of questions about the necessity of raising gas transmission charge.

He alleged that GTCL lacks transparency in the cost calculation and also project implementation.

"In many cases, the cost of projects was overvalued and they're being implemented without following the open tender method which ultimately influences the gas price at consumers' end," Shamsul Alam added.

He said many gas transmission projects were undertaken by the GTCL without checking the economic viability. "Now those projects will become non-profitable when imported LNG enters the pipelines."

Eminent energy expert Prof Nurul Islam suggested that the government should issue a gazette notification to define the role of the ministry as upstream generator in gas sector. "Otherwise, any decision on gas price hike may face litigation in the future."

Prof Dr. Badrul Imam of Dhaka University questioned the government's plan to import 4000 mmcfd LNG in next few years. "If import continues instead of gas exploration, gas price will go beyond affordability."

Sirajudowllah, a former joint secretary of the government, said many people like him do not cook meal at home because of the nagging gas crisis in Dhaka city.

The BERC will hold hearing on the appeal of the Titas Gas Transmission and Distribution Companyon Tuesday.