Another hike in gas price is imminent. There are indications that the hike would be effective from the next month when liquefied natural gas (LNG) is introduced in the city. Only last year, the government had arbitrarily raised gas price.
Many say if widespread corruption, particularly theft of gas in Titas franchise areas like Narayanganj and Gazipur, could be curbed, there would be no need to increase gas price at the consumer level after introducing imported LNG. Efficient SCADA (supervisory control and data acquisition) system in the transmission could play a significant role in stopping gas theft.
The state minister for power and energy has blamed the top management of energy companies for not taking timely steps to check thefts in the gas sector. The state-run Bangladesh Petroleum Exploration and production Company (BAPEX) also did little to enhance its efficiency. It appears that the company is not interested to recruit quality people or engage efficient consultants to increase its efficiency.
There are many ways to develop the country's gas sector. These include ensuring transparency and raising awareness about people's ownership of the natural resource. Titas Gas should identify as well as remedy the existing loopholes and develop a proper distribution system.
Meanwhile, the government is planning to raise gas price by 75 per cent on an average for different consumer groups at retail level. In the 75 per cent average hike, the gas transmission company has proposed to raise 206 per cent price for power plants - from the existing rate of Tk 3.16 to Tk 10 per cubic meter (CM). For fertiliser factories, it has proposed to hike the highest 372 per cent - from the existing Tk 2.71 to 12.80 per CM.
The proposed increase in gas price will mainly affect large-scale consumers like power plants, fertiliser factories, captive power plants, industries and CNG refuelling stations. The consumers groups say there is no justification to raise gas price when Titas Gas has over Tk 20 billion surplus funds in its hand.
The issue of fresh gas price hike has generated adverse reactions from various consumers' groups. Textile mill owners say if gas price is raised, textile sector will lose competitiveness in the international market as it will raise their production cost by 40 US cents per kilogramme (kg) of spinning thread.
A Power Development Board (PDB) official says any rise in gas price will substantially affect the cost of electricity generation and compel them to raise power tariff. Gas-fired power plants will also be affected by the increased gas prices. Leather sector is also airing identical views.
Price hike may hit the domestic gas users, too. Users of single-burners may have to pay Tk 1,000 each instead of Tk 750 and those with double-burners, Tk 1,050 instead of Tk 800.
With the launching of LNG, supply of gas from internal sources to the national grid will gradually be reduced. Gas price hike in the international market will seriously affect the country's economy.
Analysts have repeatedly spoken against gas price hike. Instead of enforcing another hike, they say, the government can stem misuse, corruption and bribe in the energy sector. Drilling for harnessing gas in the Bay of Bengal should be expedited for finding offshore oil.
There is a need for bringing structural changes in the mechanism of fixing gas price. Installation of gas meter, fixing gas price based on actual consumption and incentives for regular payment of bills by consumers are among some of them.
All said and done, the proposed gas price hike will impact public life in various ways. It will invariably lead to a rise in transport cost, electricity tariff and price of consumer goods. The government needs to reconsider the tariff hike proposal.
© 2017 - All Rights with The Financial Express