After Petrobangla, 6 distribution companies have also submitted proposals to the Bangladesh Energy Regulatory Commission (BERC) to increase gas prices. It is known that they have made proposals exactly like Petrobangla in the D-document.
Even the explanation of the rationale for increasing the price has been copied and pasted from the Petrobangla proposal. The cost of importing LNG is high, so the price needs to be increased. Although in the past, the proposal explained what kind of impact raising the price could have on the economy and trade, this time there is no trace of it neither in Petrobangla's proposal nor in the proposal of the distribution companies. The issue has been consciously avoided.
BERC Chairman Jalal Ahmed told Barta24.com that proposals have been received from several distribution companies. The technical committee is working on these. Whatever we do, we want to come to a decision as soon as possible. BERC has delayed so that no one can raise questions.
On January 6, Petrobangla proposed to increase the price of gas supplied to new industrial boilers and industrial generators (captive) from Tk. 30 and Tk. 31.75 respectively, while keeping the prices of existing customers unchanged. It is proposed to set half the bill of promised customers (already approved) at the existing rate and the other half at Tk. 75.72.
Legaly, there is no scope to consider Petrobangla's price increase proposal. Only licensees can propose a price increase. Therefore, BERC sent a letter to Titas Gas Transmission and Distribution PLC, Paschimchanchal Gas Company Limited, Jalalabad Gas Transmission and Distribution System Limited, Bakhrabad Gas Distribution Company, Karnaphuli Gas Distribution Company Limited and Sundarban Gas Company Limited, which are responsible for distribution, seeking price adjustment proposals.
The distribution companies are embarrassed by the proposal for an unusual price increase. None of them see the rationale for increasing prices by 152 percent in industry and captives. Top officials of several companies, on condition of anonymity, said, "Petrobangla is trying to raise prices by putting a gun to our shoulders. Consumers will have to face us in the public hearing. However, we do not agree with this price increase at all. As far as we know, a new price formula has been prepared as per the ministry's request. We have to propose to increase the price despite our reluctance.
Gas is purchased from the state-owned Sylhet Gas Field Company Limited at a rate of 1 taka, from Bangladesh Gas Field Company at a rate of 1.25 taka, and from Bapex at a rate of 4 taka per cubic foot. Then, the average price of gas purchased from multinational companies Chevron Bangladesh and Tallo stands at 6.07 taka per cubic meter.
In Petrobangla's price increase proposal, it said that the current import price of LNG per cubic meter is 65.70 taka. Adding VAT-tax and other charges, it stands at 75.72 taka. As a result, to sustain this sector, the gas price gap will have to be reduced. If LNG is imported as planned, Petrobangla will have a deficit of about Tk. 16,161.71 crore in the current fiscal year.
Business leaders and organizations have reacted strongly to this process of increasing gas prices. They have demanded an immediate stop to the process of increasing gas prices. They believe that industrialization will be stopped if the proposal is approved.
BERC has formed a technical committee to scrutinize the proposal to increase the price of Petrobangla gas. After receiving the report of the technical committee as per the rules, an order was given for a public hearing.