The Financial Express

Bracing for another round of gas price-hike

| Updated: October 17, 2017 14:03:20

Bracing for another round of gas price-hike

Energy experts say the additional amount of money that is required to meet the expenses for increased salary of the government service-holders, can be collected from the surplus fund, now left idle with the gas companies.  The latter are not using this surplus money for any development projects in the gas sector.
Ironically, the government is hiking gas price, on one hand, and it is failing to take any meaningful action to redress severe gas scarcity throughout the country, on the other. With the advent of the winter, gas shortage has hit every sector hard. Titas Gas claims it is trying its best to solve the problem.
When Bangladesh is opting for raising gas tariff, neighbouring India cut its natural gas price by 18 per cent in October this year, fixing it at $3.06 per million British thermal units (Btu). Such cut was made for the fourth consecutive times there, in line with the decline in prices of the fuel in the global market.
After Bangladesh hiking the gas charges September last and that too, in the wake of several such hikes over the past years, it is difficult to justify another round of price hike, particularly given the sluggish business environment, now prevailing in the country. Thus whatever benefit, if any, may otherwise accrue to the government from upward revision of gas tariff, the same would be hardly of any worthwhile purpose for accelerating the pace of the economy's real productive growth.
Besides households and CNG stations, the authorities have reportedly suggested for a 32 per cent rise in gas rates for power production sector, about 36 per cent for fertiliser factories, 127.27 per cent for captive power plants, around 56 per cent rise for industries, 67 per cent for commercial areas and 68 per cent for tea gardens.
Without looking for too much dependence on gas, all concerned - the government and the people - do need now to think about alternative energy sources. It is not feasible to deal with the challenges of a severe gas supply shortage, only by increasing gas prices. This situation can be eased to some extent by fixing the problems. Introduction of a metre-based billing system, stoppage of illegal gas connections and reduction of illegal gas bills merit here attention.
Some irregularities have already been reported about the meter-based billing system. Many have made complaints about the faults of the existing billing system. In good number of cases, bills are reported to be prepared even without reading the meters. Lax monitoring by the gas transmission and distribution authorities is allegedly responsible for tampering the bills.
It is a hell-like situation about a competitive bout of price rises everywhere that now faces the users or consumers. The Power Development Board (PDB) has already made public its plan to raise power price soon. The Dhaka Water and Sewage Authority (WASA) increased its changes within four months, following its previous hike this year. But scarcity of water supply and malfunctioning sewerage system in the city and its suburbs continue to prevail, showing no sign of improvement in the situation. Two city corporations have meanwhile served notices upon the citizens for reassessment of the holding tax and valuation of the land.
All such moves, coming in a close sequence, will surely put extra burden on those who do not have enough income to pay such bills. It is yet to be ascertained as to how much hardship they will suffer on account of simultaneous increases in gas, electricity & water, charges and municipal holding taxes. Its remains anybody's guess.
As many considers, the gas price hike is 'irrelevant and illogical', it is time for the government to make an objective examination of various options for a possible way-out. As the liquefied gas price on the international market is low, it can also look forward to importing low cost gas.
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