Finally, the Energy and Mineral Resources Division has approved the metering system proposed by Petrobangla. The pro-rata system, which has been in place for a long time, has been canceled and gas bills have been ordered to be billed according to the meter.

A letter signed by Md. Sheikh Shahidul Islam, Deputy Secretary of the Energy and Mineral Resources Division, has been given approval in a cryptic manner from January 1, 2023.

Although the Gas Transmission Company Limited (GTCL) has been measuring for a long time, there was no system for measuring the time of supply. The new system has said that the metering system will be introduced at all levels. From now on, just as GTCL is receiving gas according to the meter, the distribution company will have to receive it through the meter.

The letter from the Energy and Mineral Resources Division has directed to take effective measures to stop illegal connections and gas theft to reduce system losses. It has been said that the amount of system losses due to administrative weaknesses should be identified and action should be taken against the officials and employees involved. At the same time, those who will play a positive role in reducing system losses should be evaluated.

The letter has given 4 instructions to overcome the financial losses of GTCL (Gas Transmission Company Limited), which has introduced the metering system. GTCL can suspend the payment of the gas bill for that amount until BERC decides on who will bear the bill for the gas used as fuel for Muchai Compressor Station, how the previous bill will be adjusted.

It has been recommended to immediately re-determine GTCL's condensate transmission charge, and to share the transmission charge before transferring all the high-pressure transmission pipelines that are not built under the ownership of GTCL to GTCL.

Considering the amount of technical system loss that GTCL is experiencing and may experience in the future due to the introduction of meters at the off-transmission stage, GTCL will apply to BERC for approval of technical system loss.

So far, GTCL has made a huge profit by shifting the system loss to other companies. At the same time, due to the high volume, it has collected more transmission charges. From that mountain of profit, it has been getting profit bonuses ranging from 2 to 6 lakh taka every year. When Petrobangla started the process of installing meters at the supply level and introducing a measurement system, tensions started with the former chairman (Janendra Nath Sarkar). GTCL threatened to go on strike and even filed a written complaint against Petrobangla.

On the other hand, Petrobangla's proposal sent to the Energy and Mineral Resources Division said that although GTCL supplies gas to distribution companies through off-transmission points, it was not possible to determine any difference in gas in GTCL's transmission system, either technically or otherwise, as most of the off-transmission points did not have direct gas metering. This would have made it impossible for the distribution companies to determine the actual purchase amount and the losses or differences in the transmission system would have been merged with the distribution company's own differences. In the current system, gas production companies, IOCs and RLNG are receiving gas from sources through metering at a total of 20 points and supplying it to distribution companies through 64 off-transmission points.

A statistic of the purchase and sale of gas transmission and distribution companies after the installation of meters shows that GTCL's system loss was 2.95 percent in January 2023, 2.99 percent in February, 3.10 percent in March and 2.41 percent in April. On the other hand, according to the meter, in March (2023), Titas Gas Transmission and Distribution Company lost 10.78 percent, Bakhrabad Gas Distribution Company lost 6.38 percent, Jalalabad Gas Transmission and Distribution System Limited lost 1.34 percent, and Karnaphuli Gas Distribution Company lost 2.05 percent. The Petrobangla letter mentioned that the 6 distribution companies had a gas loss of 161 million cubic meters. At the same time, instructions were sought to reduce system losses according to the meter. On the other hand, the Bangladesh Energy Regulatory Commission said in an order of 2022 that the system loss of gas will not be more than 2 percent under any circumstances. It must be brought down below this. There is no system loss of more than 2 percent anywhere in the world. But so far, gas stolen through various loopholes is being continued as system loss.

Petrobangla has proposed to increase the price of gas used in industries and captive power. Bangladesh Energy Regulatory Commission (BERC) Chairman Jalal Ahmed confirmed to Barta24.com that he received Petrobangla's proposal regarding the increase in gas prices.

He told Barta24.com that he received Petrobangla's proposal in the afternoon. I have down-marked the proposal and given it to the member gas. We will sit on this proposal tomorrow (January 7).

In response to a question about what Petrobangla wanted in its proposal, the BERC Chairman said, "I did not have time to look into the matter in detail. I have only marked it down."

The source said that instead of fixing the price for new connections, it has been said to set the price equal to the cost of imported LNG. Even if you want to increase the load in old industries, you will have to calculate double the price (LNG import price).

If the price in the international market increases, the price will increase, and if it decreases, it will decrease. Two types of rates have been proposed. One rate for approved (promised) but unconnected customers, and a different rate for new industries. Half of the gas price for promised customers will be the same as the existing rate, and the import price for half. Currently, the price of gas used in industries is being charged at Tk. 30 per cubic meter, and Tk. 30.75 for captives.

Bangladesh has been importing LNG under long-term contracts (G2G) and from the spot market (through open tenders). Strict confidentiality is maintained in the G2G contract, which is why the price is not disclosed. However, last August, the price per cubic meter under the spot market contract was Tk. 71.

If the proposed formula is approved, the promised customer may pay about Tk. 60 per cubic meter for half of the gas he uses. The existing rate for half will be paid at Tk. 30. In the case of new connections, the full bill will be Tk. 60.

The Division of Energy and Mineral Resources gave in-principle approval to the proposal to increase the gas price in a meeting on December 27. It states that in case of potential new gas connections in the industrial and captive categories, customers will pay the total cost of LNG import. In case of promised (initial consent letter/letter of acceptance issued) gas connections in the industrial and captive categories, customers will be entitled to up to 50 percent of the existing industrial/captive power category price. In case of excess consumption, they will pay the total cost of LNG import.

At the same time, it has been said that in case of excess consumption of existing industrial and captive categories, customers will pay the total cost of LNG import.

It has been stated that LNG import price will mean the average price of the total cost of LNG purchase (LNG purchase price, regasification charge, VAT, tax and various margins) under the long-term contract and for the previous 3 months of the bill submitted.

In light of that decision of the Energy and Mineral Resources Division, it will be sent to the Bangladesh Energy Regulatory Commission (BERC). For this, existing customers of the industrial and captive category have been asked to send monthly statements of gas consumption in excess of the permitted load (from July 2023 to October 2024).

It is learnt that the letter signed by Petrobangla General Manager (Accounts) Abdul Jalil has been sent to the Managing Directors of 6 distribution companies. The letter states that in order to send the said proposal (proposal to re-fix gas tariff) to the Bangladesh Energy Regulatory Commission, information regarding the amount of gas consumption in excess of the permitted load by existing customers of the industrial and captive category is required. A table has been attached to the letter and information has been asked to be provided accordingly.

Petrobangla sources said that 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. After that, the average price of gas purchased from multinational companies Chevron Bangladesh and Tallo stands at 6.07 taka per cubic meter. Gas is available from these domestic sources. Approximately 2000 million cubic feet of gas is available daily. 900 million cubic feet of gas is being supplied from LNG imports. The average price in the 2023-24 fiscal year stood at Tk. 24.38. And the average selling price of gas was Tk. 22.87. This resulted in a loss of Tk. 1.56 per cubic meter for Petrobangla. In the 2023-24 fiscal year, the price of LNG brought from the sports market fell to Tk 65, which has to be purchased for Tk. 71 in August (2024).

The latest executive order on February 25, 2024, increased the price of electricity generation (government and IPP) from Tk. 14 to Tk. 14.75 per cubic meter and captive power from Tk. 30 to Tk. 30.75 per cubic meter. Before that, the price of gas was increased by an average of 82 percent by an executive order in February 2023.

Inflation in the country decreased in December. Food inflation, which is the most stressful for the common people, has seen a downward trend. Food inflation was 12.92 percent in December. And overall inflation has decreased by 10.89 percent. However, the fact that these two inflation rates are still in the double digits means that people with fixed incomes are struggling to make both ends meet.

The Bangladesh Bureau of Statistics (BBS) released inflation data for the last month of 2024 and said that the one-year moving average inflation from January to December last year was 10.34 percent. In the previous year, i.e. 2023, this rate was 9.48.

Meanwhile, overall non-food inflation was 9.39 percent in November, but it decreased to 9.26 percent in December.

In addition, overall inflation in rural areas decreased by 0.44 percent to 11.09 percent in December. Of this, food inflation was 12.63 percent and non-food inflation was 9.65 percent.

And overall inflation in urban areas decreased by 0.53 percent to 10.84 percent. Of this, food inflation was 13.56 percent and non-food inflation was 9.17 percent. 

The ministry has given in-principle approval to double the gas prices for new connections of industries and captives. The Energy and Mineral Resources Division wants to charge the cost of imported LNG without fixing the price. Even if it wants to increase the load in old industries, it will have to calculate double the price.

If the price increases in the international market, the price will increase, and if it decreases, it will decrease. Two types of prices have been proposed. One price for approved (promised) but not connected customers, and a different price for new industries has been proposed. Half of the gas price for promised customers will be equal to the existing price, and the import price for the other half. Currently, the price of gas used in industries is Tk. 30, and Tk. 30.75 for captives.

Bangladesh has been importing LNG under the long-term contract (G2G) and from the sport market (through open tender). Strict confidentiality is maintained in the G2G contract, which is why the price is not disclosed. However, according to the Spot Market agreement last August, the price per cubic meter has fallen to Tk. 71.

If the proposed formula is approved, the promised customer may pay about Tk. 60 per cubic meter for half of the gas he uses. The existing rate for half will be paid at the rate of Tk. 30. In the case of new connections, the bill will be paid at the rate of Tk. 60 in full.

The Division of Energy and Mineral Resources gave in-principle approval to such a decision in a meeting on December 27. It said that in the case of potential new gas connections in the industrial and captive categories, customers will pay the total cost of LNG import. In the case of promised (initial consent letter/signature letter issued) gas connections in the industrial and captive categories, customers will receive up to 50 percent of the existing industrial/captive power category price. In case of excess consumption, they will pay the total cost of LNG import.

At the same time, it has been said that existing customers in the industrial and captive categories will pay the total cost of LNG import in case of excess consumption beyond the permitted load.

LNG import price means the average price of the total cost (LNG purchase price, regasification charge, VAT, tax and various margins) of the bill submitted under the long-term contract for the previous 3 months.

In light of the decision of the Energy and Mineral Resources Division, it will be sent to the Bangladesh Energy Regulatory Commission (BERC). For this, existing customers of the industrial and captive category have been asked to send monthly statements (from July 2023 to October 2024) on the amount of gas consumed in excess of the permitted load.

It is learnt that the letter signed by Petrobangla General Manager (Accounts) Abdul Jalil has been sent to the Managing Directors of 6 distribution companies. The letter states that in order to send the said proposal (proposal to re-fix gas tariffs) to the Bangladesh Energy Regulatory Commission, information regarding the amount of gas consumed in excess of the permitted load by existing customers of the industrial and captive category is required. A table has been attached to the letter and information has been asked to be provided accordingly.

Petrobangla General Manager (Accounts) Abdul Jalil confirmed to Barta24.com that the letter was sent to the distribution company.

Petrobangla sources said that gas is purchased from the state-owned Sylhet Gas Field Company Limited at a rate of Tk. 1, from Bangladesh Gas Field Company at a rate of Tk. 1.25, and from Bapex at a rate of Tk. 4 per cubic foot. Then, the average price of gas purchased from multinational companies Chevron Bangladesh and Tallo stands at Tk. 6.07 per cubic meter. Gas is available from these domestic sources, approximately 2000 million cubic feet of gas is available daily. 900 million cubic feet of gas is being supplied from LNG imports. The average price in the 2023-24 fiscal year stood at Tk. 24.38. And the average selling price of gas was Tk. 22.87. Due to this, Petrobangla has incurred a loss of Tk. 1.56 per cubic meter. In the 2023-24 fiscal year, the price of LNG brought from the spot markets fell to Tk. 65, which has to be purchased for Tk. 71 in August (2024).

The latest executive order on February 25, 2024, increased the price of electricity generation (government and IPP) from Tk. 14 to Tk. 14.75 per cubic meter and captive power from Tk. 30 to Tk. 30.75 per cubic meter. Before that, in February 2023, the price of gas was increased by an average of 82 percent by executive order. At that time, the price of gas in the power sector was increased from Tk. 5. 2 paisa to Tk. 14. And in captive power, it was increased from Tk. 16 to Tk. 30.

And through public hearings, the Bangladesh Energy Regulatory Commission increased the price of gas in June 2022. Electricity was set at Tk. 5.02, captive and fertilizer factories at Tk.16, large industries at Tk. 11.98, and medium industries at Tk. 11.78.

There was widespread criticism of the price increase in the executive order during the Awami League government. The interim government has repealed the law on gas and electricity pricing through an executive order as soon as it came to power. Power, Energy and Mineral Resources Adviser Fawzul Kabir Khan has said in several meetings that BERC will determine gas and electricity prices from now on. It is learnt that a proposal will be sent to BERC as soon as the information from the distribution companies is available. The new formula will create unequal competition in the industry, existing industries will get gas at a lower price, and new industries will not be able to survive in the competition by buying gas at a higher price. Business leaders believe that this may discourage new industries.