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The Financial Express

Gas companies' tariff hike bids 'faulty', say experts, rights groups

| Updated: January 21, 2022 17:50:59


Gas companies' tariff hike bids 'faulty', say experts, rights groups

Energy experts and rights groups have termed the natural gas tariff hike proposals 'faulty', saying the gas marketing and distribution companies do not have any authority to seek the tariff hike.

The state-run gas marketing and distribution companies can only seek adjustment of their margin, as they sell gas on behalf of the state-run Petrobangla to consumers and get margin from the entity in return.

Petrobangla is the lone buyer of natural gas from international oil companies (IOCs) and gas exploration and production companies. The entity also purchases expensive liquefied natural gas (LNG) from long-term and spot suppliers.

"It is Petrobangla alone, which should seek any hike in natural gas tariff from the energy regulator," energy adviser of Consumers Association of Bangladesh (CAB) Professor Shamsul Alam told the FE on Thursday.

He said Petrobangla purchases natural gas from different suppliers, and also receives necessary fiscal support from the government to carry out its job.

If taking any fiscal support from consumers through hiking natural gas tariff is deemed necessary, it should come from Petrobangla.

Mr Alam also accused the Bangladesh Energy Regulatory Commission (BERC) for receiving proposals from the gas marketing and distribution companies for raising natural gas tariff.

"The BERC should be brought into book and punished for violating its rule," he opined.

Energy expert Professor M Tamim alleged that Petrobangla might have created pressure on its subsidiary gas marketing and distribution companies to place the tariff hike proposals to the BERC.

Petrobangla only can incur loss due to increase in import price of LNG or higher cost for buying natural gas from the IOCs and local producers, but not the gas marketing and distribution companies, he clarified.

The country's business communities are worried over the government agencies' move to raise gas tariffs, and they urge urgent tapping of local energy to avert high-priced LNG import.

The state-run gas marketing and distribution companies, including Titas Gas Transmission and Distribution Company Ltd, Bakhrabad Gas Distribution Company Ltd, Jalalabad Gas Transmission and Distribution System Ltd, Sundarban Gas Company Ltd, Pashchimanchal Gas Company Ltd, and Karnaphuili Gas Distribution Company Ltd, have submitted proposals to the BERC for doubling gas tariffs for all consumers on the ground of high-priced LNG import.

They have submitted proposals separately to the BERC for an across-the-board hike in the weighted average natural gas price by 117.41 per cent to Tk 20.35 per cubic metre from the existing rate of Tk 9.36 per cubic metre.

The gas marketing and distribution companies have proposed to raise the tariff for industrial consumers to Tk 23.24 per cubic metre from Tk 10.70.

For household consumers having single-burner stove, the gas firms have proposed to raise the monthly charge to Tk 2,000 per month from the existing Tk 925, while for double-burner users to Tk 2,100 per month from Tk 975.

They want to raise the tariff for metered household consumers to Tk 27.37 per cubic metre from the existing Tk 12.60 per cubic metre.

Natural gas tariff for power plants and fertiliser factories has been proposed to increase to Tk 9.66 per cubic metre from Tk 4.45.

For captive power plants, they have proposed a new rate of Tk 30.09 per cubic metre from the existing Tk 13.85. The gas companies have sought to raise CNG price at retail level to Tk 76.04 per cubic metre from Tk 35. The gas tariff for small and cottage industries has been proposed at Tk 37.02 per cubic metre in a steep rise from Tk 17.04.

For hotels and restaurants, the gas firms have proposed to hike the tariff to Tk 49.97 per cubic metre from Tk 23.0.

The gas marketing and distribution companies have sought to hike the tariff for tea estates to Tk 23.24 per cubic metre from the existing Tk 10.70.

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