CAB boycotts BERC hearing on proposed gas tariff hike

The Consumers Association of Bangladesh (CAB) has boycotted Wednesday’s public hearing over the proposed gas tariff hike and demanded cancellation of the tariff hike move of the energy regulatory commission by Monday or face mass movement.

The CAB members, along with different stakeholders and consumers, at the half way stage, demanded an immediate halt of the hearing, but the Bangladesh Energy Regulatory Commission (BERC) continued it after lunch amid protests.

They demanded BERC to unearth how much money was looted in the energy sector through illegal and illogical spending over the past 15 years from 2010 to 2024.

The BERC arranged the public hearing at the BIAM Auditorium following submission of proposals by state-run Petrobangla and its subsidiaries—gas marketing and distribution companies—for the gas tariff hikes for new industries and extended units of existing ones.

The government would be able to fetch around Tk 34 billion annually once the gas tariff is hiked.

The BERC's public hearing for gas tariff hike by up to 152.40 per cent is illegal and contradictory to the spirit of the July-August uprising, energy adviser to CAB Prof. M. Shamsul Alam said during his speech ahead of the public hearing.

He blamed the BERC for arranging the public hearing instead of its suspension in line with the CAB’s previous demand.

The commission should advise the government to check illegal and illogical spending, he said.

The commission will have to reveal how much tariff and government subsidy it will be able to cut down through checking illegal and illogical spending, he added.

Mr Alam also demanded the trial of "energy culprits" through the formation of a tribunal by the BERC with retired judges of the Supreme Court.

Mr Alam warned the commission of facing tough movement if the public hearing move is not cancelled within the next three working days.

“Now we are only demanding, but after Monday rigorous movement would be launched,” said the CAB adviser.

President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem urged the government to check gas pilferage instead of hiking tariffs.

According to Titas Gas Transmission and Distribution Company Ltd (TGTDCL), currently around 13 per cent systems loss is prevailing in its franchise area, which is, in other words, gas theft.

If the system loss could be reduced to 5.0 per cent, some Tk 80 billion could be saved, he said.

Besides, there is a value-added tax (VAT) on the import of liquefied natural gas (LNG).

If the National Board of Revenue (NBR) withdraws VAT on Petrobangla against LNG imports, the later would get around Tk 35 billion in its coffer, Mr Hatem said, refuting gas tariff hike proposals.

Bangladesh’s gas-guzzling export-oriented sectors might face a slump in export earnings due to uneven competition if gas tariffs are hiked for new industries, he said.

No new industries would be established, fearing uneven completion with the existing ones, and the country’s economy would be affected, he warned.

Protesting the gas tariff hike move Asif Ashraf of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said fetching only around Tk 34 billion with the gas tariff hike would not be a good example.

He rather urged the government to extend all-out support to boost exports, saying, if the exporters get US$1 support, they could fetch foreign currency worth US$8.50.

Communist Party of Bangladesh (CPB) leader Ruhin Hossain Prince demanded cancellation of the public hearing ahead of the ensuing Ramadan.

As per the tariff hike proposals of state-run gas entities, new industries and extended units of existing industries will have to pay Tk 75.72 per cubic metre of LNG, or up to 152.40 per cent higher rates from existing ones, currently at around Tk 30 per cubic metre for all industries, big, medium, small and cottage alike.

Owners of all new industries and captive power plants must pay a natural gas tariff of Tk 75.72 per cubic metre for getting new piped gas connections, according to the proposal.

For the new captive power plants, the new tariff will be 141.96 per cent higher than the existing tariff of Tk 31.50 per cubic meter.

New industries and captive plants, which already attained commitments or demand notes from companies for raising gas loads, must pay 50 per cent, or half of the new gas commitments, at current rates.

On the other hand, the remaining half would be paid in accordance with the proposed rate at Tk 75.72 per cubic metre LNG, the tariff hike proposal says.

Besides, the owners of existing industries and plants must pay a tariff at Tk 75.72 per cubic metre for utilising additional gas above their existing approved loads.

To calculate import prices for fixing tariff, state-run gas marketing and distribution companies will calculate three months' average prices of overall LNG import costs from long-term LNG suppliers and spot LNG suppliers.

Representatives of different business bodies and organisations also took part in the public hearing protesting the gas tariff hike.

This is the first time that the CAB has boycotted public hearings protesting a gas tariff hike. It also organised a human chain in front of the BIAM Auditorium protesting the tariff hike move.

azizjst@yahoo.com