The Financial Express

Bid for doubling gas price, fear of public suffering expressed

| Updated: January 19, 2022 18:09:55

Bid for doubling gas price, fear of public suffering expressed

State-run gas companies bid for doubling gas tariffs for all consumers on grounds of high-priced import of liquefied natural gas (LNG), fueling protests.

They have submitted proposals separately to Bangladesh Energy Regulatory Commission (BERC) for an across-the-board raise in the weighted average natural gas price by 117.41 per cent to Tk 20.35 per cubic metre from the existing rate of Tk 9.36 per cubic metre.

"We got proposals from different state-run gas-marketing and- distribution companies to raise gas-tariff rates," a senior BERC official acknowledged.

For household consumers having single-burner stoves, the gas firms propose to raise the monthly charge to Tk 2,000 from the existing Tk 925 per month, while for double-burner users to Tk 2,100 per month from Tk 975.

The Consumers Association of Bangladesh (CAB), a platform to protect the interests of consumers, terms the hike proposals ''illogical'' and demands a ban on LNG import.

Energy-expert Prof Ijaz Hussain suggests a cut in natural gas supplies to compressed natural gas (CNG) filling stations as a way of averting the gas import.

The BERC last jacked up the gas tariffs by 32.8 per cent on average with effect from July 1, 2019, in the biggest-ever hike so far.

Bangladesh's average natural gas output currently hovers around 3,000-3,100 million cubic feet per day (mmcfd) of which local gas fields provide around 2300 mmcfd gas, or 74.19 per cent of the total, and the remaining 700-800 mmcfd is re-gasified LNG.

Of the total LNG imports, around 550 mmcfd comes from long- term suppliers where the import price is almost stable and below US$11.5 per million British thermal unit (MMBTU).

Only around 100-150 mmcfd LNG is imported from spot market where the price is volatile.

Natural gas production cost from local fields remained almost stable, below US$3.0 per cubic metre, market-insiders say.

The gas firms have proposed to raise tariffs for industrial consumers to Tk 23.24 per cubic meter from Tk10.70.

They want to raise tariffs for metered household consumers to Tk 27.37 per cubic metre from existing Tk 12.60 per cubic meter.

Natural-gas tariffs for power plants and fertiliser factories have been proposed up to Tk 9.66 per cubic metre from Tk 4.45.

For captive power plants they proposed new rate at Tk 30.09 per cubic meter from existing Tk 13.85.

The gas companies seek to raise the CNG price in retail level to Tk 76.04 per cubic meter from Tk 35.

Gas tariffs for small and cottage industries have been proposed at Tk 37.02 per cubic metre in a steep rise from Tk 17.04.

For hotels and restaurants the gas firms have proposed to hike tariffs to Tk 49.97 per cubic metre from Tk 23.0.

The gas-marketing and-distribution companies have sought to hike tariffs for tea estates to Tk 23.24 per cubic meter from existing Tk 10.70.

In a vehement protest against the move to raise gas rates, CAB's energy adviser Prof Dr Shamsul Alam demands expediting the oil- and-gas exploration activities to increase the production of local gas.

Coal extraction from local mines should also be accelerated, he says.

"We the consumers are ready to undergo electricity load-shedding and rationing in gas consumption, if necessary," says Mr Alam about any austerity measure for the time being.

Professor Hossain supports raise in natural gas tariffs for power plants and fertilizer factories.

He also seeks metered gas supply to households and total halt in gas supply to households in phases, in order to give productive sectors adequate fuels.

"Industries should be offered natural gas at reasonable rates to ensure economic growth," he says.

Mr Hussain stands opposed to the government move to randomly allow LNG-based power pants and stresses rigorous exploration activities to increase the production of local gas and coal.

Before July 2019, the BERC previously had raises natural gas tariffs by 22.70 per cent on average for the consumers in March 2017.

In September 2015, the commission had hiked the average gas tariffs by 26.29 per cent.

Previously, the tariffs were hiked by 11.22 per cent in 2009.

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