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New industries are now to pay Tk 40 and captive power plants Tk 42 per cubic meter of gas as the government jacked up tariffs of the basic fuel by 33 per cent on average, overriding objections.
The hike takes "immediate effect from today," it was officially announced as Bangladesh Energy Regulatory Commission (BERC) Sunday pushed the decision through protests and opposition from businesses and rights groups.
Heretofore, the tariff rate for new industries had been Tk 30 and for captive power plants Tk 31.50 a unit.
The commission chairman, Jalal Ahmed, announced the new tariffs at a press briefing at the BERC auditorium in Dhaka's Karwan Bazar business heartland.
New industries and captive plants, which already attained commitments or demand notes for raising gas loads, must pay 50 per cent, or half the new gas commitments, at current rates.
On the other hand, the remaining half would have to be paid in accordance with the new tariff rates.
Besides, the owners of existing industries and plants must pay tariffs as per new rates for utilising additional gas above their existing approved loads, according to the BERC announcement.
Gas tariffs for all the existing consumers, including power plants, industries, fertiliser factories, CNG filling stations and tea estates are, however, kept unchanged.
The hike in the natural-gas tariffs came after a public hearing against the demand for a rise up to 152.40 per cent or to Tk 75.72 per cubic metre placed by state-run Petrobangla and gas-marketing and-distribution companies.
The Consumers Association of Bangladesh (CAB) had boycotted the public hearing while business leaders and associations opposed the tariff-hike move, but to no avail.
"We have raised the gas tariff at a tolerable level for new industries and captive power plants although the demands from the state-run entities were for raising further by over 150 per cent," said the BERC chairman at the press conference.
Mr Ahmed could not say whether the tariff hike would impact future investment, but said that it would create an opportunity to look for alternative energy sources like liquefied petroleum gas (LPG) and solar power for future industries.
If the tariffs had been hiked as per the demands of state-run gas entities, Petrobangla could earn around Tk 32.40 billion but with the 33-percent hike the corporation would be able to get around Tk 11 billion additionally, he expected.
The BERC chairman could not also say about the amount of subsidy Petrobangla would require due to the new gas tariffs, which are less than their expectations.
But, the BERC chairman expects. the subsidy requirement would decrease.
"Having different gas tariffs for same type of consumers is discriminatory and a violation of the basic rights as mentioned in the constitution," CAB energy adviser Prof M Shamsul Alam told The Financial Express in an instant reaction over the tariff hike.
Petrobangla could save around Tk 35 billion if double taxation against imports of expensive liquefied natural gas (LNG) could be removed, he said.
The tariffs have been hiked by the BERC arbitrarily bypassing the opposition raised during the public hearing, he said.
It went against the spirit of July-August uprising and was a continuation of the 'previous BERC,' which was dominated by the previous government, Professor Alam alleged.
Bangladesh's gas-guzzling export-oriented sectors might face slump in export earnings due to uneven competition after the gas-tariff hike for new industries, President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem said.
"No new industries would be established fearing uneven completion with the existing ones," he feared.
Mr Hatem urges the interim government to take necessary steps for checking gas pilferage.
Azizjst@yahoo.com