Trade
5 years ago

Gas companies to seek tariff hike afresh

They'll place bids to BERC soon

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Updated :

The state-run gas companies will place fresh proposals to the energy regulator, seeking tariff hike for almost all sorts of gas users, as the country's LNG import is expected to double by April next.

"We are working to place the tariff hike proposal to the Bangladesh Energy Regulatory Commission (BERC) soon," a senior Petrobangla official told the FE.

The official did not mention the extent of the hike that Petrobangla and its subsidiary gas marketing and distribution companies will seek, but said it will be almost similar to those of the previous proposals.

BERC in its verdict on October 16, 2018, turned down the previous proposals of Petrobangla and its subsidiary companies, keeping the natural gas tariff unchanged, as the volume of LNG import was less than expected.

The state-run Petrobangla and its subsidiary gas companies sought a hike in natural gas tariff, calculating import of LNG to the tune of 1,000 million cubic feet per day (mmcfd), BERC Chairman Monowar Islam told the newsmen then.

But re-gasified LNG (RLNG) supply was hovering around 300 mmcfd during October.

Currently the volume of RLNG supply from the country's maiden LNG import terminal - a FSRU (floating, storage, re-gasification unit) - has increased to around 500 mmcfd, according to statistics from Petrobangla.

LNG import is expected to double from April, as the country's second FSRU is expected to be commissioned in early April, said a senior official of the Ministry of Power, Energy and Mineral Resources.

Officials said Petrobangla and its subsidiary gas marketing and distribution companies submitted proposals to BERC in early 2018 to raise blended domestic gas price for all types of consumers except households.

In their proposals, the gas distribution companies, including the Titas Gas Transmission and Distribution Company Ltd (TGTDCL) and the Karnaphuli Gas Distribution Company Ltd (KGDCL), sought to almost double natural gas tariff to Tk 12.95 per cubic metre from the existing Tk 7.39.

They wanted to raise tariff for gas-fired power plants to Tk 10 per cubic metre from the existing Tk 3.16, for fertiliser factories to Tk 12.80 per cubic metre from the existing Tk 2.17.

The price of compressed natural gas (CNG) in the filling stations was proposed to be hiked to Tk 48 per cubic metre from the existing Tk 40.

For the industrial sector, the natural gas tariff as sought by the distributors was Tk 15 per cubic metre in place of the existing Tk 7.76.

For gas-fired captive power plants, the proposed tariff was Tk 16 per cubic metre from the existing Tk 9.62.

Gas tariff for tea gardens was proposed to be fixed at Tk 12.80 per cubic metre from the existing Tk 7.42.

To cope with the unchanged gas tariff, Petrobangla sought fiscal support of around Tk 40 billion last month (January) to purchase LNG from global suppliers for the current fiscal year, 2018-19 (until June 2019).

The country has started consuming RLNG commercially since August 18, 2018.

The National Board of Revenue (NBR), meanwhile, waived supplementary duty (SD) and customs duty (CD) at consumers' end and also lowered advance income tax (AIT) to aid Petrobangla as well as users.

NBR waived a total of 122 per cent tax on the locally-produced natural gas at consumers' end to keep the blended gas price rational. NBR, however, slapped 15 per cent value added tax (VAT) on imported LNG.

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