Proposed tariff hike and gas pilferage   

Shamsul Huq Zahid   | Published: February 17, 2019 22:11:17

Gas distribution companies could not wait any longer. In less than a month from the polls day (December 29, 2018) they submitted fresh proposals to the Bangladesh Energy Regulatory Commission (BERC) for raising gas tariff for all section of consumers.

These companies had submitted proposals for tariff hike well ahead of poll time. But the government decided to delay any decision on those because of the last general election.

Now that the election is over, the gas distribution companies with renewed vigour are pursuing their gas tariff hike proposals.

The energy regulator, reportedly, would start public hearing on the proposals from the 11th of next month. After the hearing, there could be a public announcement on the hike of gas tariff.

What remains a matter of concern for the consumers is the extent of gas tariff hike. The gas distribution companies have, reportedly, proposed an average tariff hike of 66 per cent.

In the case of gas supplied to power sector, the distribution companies have sought 142 per cent tariff hike. They have proposed 158 per cent tariff hike for urea fertiliser companies. For the industrial consumers, the hike proposed is nearly 100 per cent.

Similarly, the distribution companies have sought 25 per cent hike in tariff for compressed natural gas (CNG). Domestic consumers of natural gas also have not been spared.  They will see a 25 per cent hike for single-burner gas oven and 50 per cent hike for double-burner oven if the proposals submitted by the gas companies are accepted.

The gas distribution companies have developed a habit of raising gas tariff, at least, once a year. Now they have got yet another excuse to do so. This time they are citing the purchase of relatively expensive liquefied natural gas (LNG) in support of their proposals. The average cost of procurement of locally extracted gas now is Tk 7.35 per cubic metre. But the cost, according to the distribution companies, has gone up to Tk 12.19 per unit following the mixture of LNG with the local gas. There are also some other additional costs.

The distribution companies do place reasons behind proposing hike in gas prices. Though consumers individually do not remain present at the public hearings, the Consumers Association of Bangladesh (CAB), a rights body, and some other rights activists do represent them and oppose price or tariff hike proposals.

But the arguments and issues raised on behalf of the general consumers, usually, do not receive that much of importance from the authorities concerned. The recommendations that emerge following the hearings, in most cases, favour the gas and power distribution companies, not the consumers. The price issues concerning petroleum fuel are not at all subjected to public hearings at the BERC.

There is no denying that consumers' rights movement in Bangladesh is very weak. A small number of organisations are occasionally found trying to raise their voice. But, they lack both manpower and resources necessary to make their voice heard. The consumers need to be organised under the banners of genuine rights organisation and do what is needed to make them strong and effective enough.

It is almost certain that domestic consumers would soon see a notable increase in gas tariff. Besides, they stand to suffer more, financially, because of the hike in gas tariffs in other areas. For instance, the power distribution companies, in all likelihood, would hike their tariff to compensate for increased gas price.

Besides, additional costs on account of gas tariff hike would be passed on to the consumers by both industrial and commercial establishments. Overall, the gas tariff hike might lead to price instability, at least, to a certain degree.

The addition of LNG, which is imported at costs much higher than that of gas produced locally, has necessitated some hike in gas prices for all types of consumers. But the hike suggested by the distribution companies appears to be too high.

The gas distribution entities could well manage even without any hike in gas tariff if they were able to plug, what is described as, the system loss. The Titas or any other gas distribution company would instantly disagree, but the fact remains that most part of the so-called system loss is nothing but large-scale pilferage of gas.

Pilferage of gas along distribution pipelines is widespread. There were sporadic raids to stop it. Since the pilferage has been taking place in connivance with the officials and employees of gas distribution companies, the attempts to stop gas pilferage have ended in failure. Stories do appear in newspapers often how some unscrupulous meter readers and linemen of gas distribution companies amassed wealth over the years without any sort of monitoring and supervision of the relevant high officials.

However, mismanagement, inefficiency, corruption etc., have been eating into the vitals of most state-owned enterprises for long. Unfortunately, no government has ever tried sincerely to address the problem.


Share if you like