POBNEWS24, Dhaka, Jan 19, 2022 :
Within two months of the rise in fuel prices, gas prices have begun to plummet. Earlier this month, the Department of Energy decided to offer a price increase. Gas distribution companies also hastily submitted proposals to double last week. The Bangladesh Energy Regulatory Commission (BERC) did not accept the proposal as it was not legal.
This was confirmed to Prothom Alo by two high level officials of BERC . They say that in order to apply for increase in gas price, the proposal has to be submitted in accordance with the regulations. The distribution company did not comply. Did not submit required documents including audit report. So they have been asked to apply according to the rules. No valid application was submitted till Tuesday.
Bureaucrats did not insist on gas exploration as there was an opportunity to import LNG. If the price of gas rises after oil, there will be an extreme risk of rising inflation. Therefore, rationing should be done without buying from the open market.
On January 3, the Ministry of Power, Energy and Mineral Resources sent a letter to Bangladesh Oil, Gas and Mineral Resources Corporation Petrobangla asking it to propose increase in gas prices. They announced the decision to handle the subsidy pressure. Then the six gas distribution companies made the same proposal. They want to increase the residential price from 975 to Tk 2,100 in two stoves and from 925 to Tk 2,000 in one stove. They also demanded that the price of gas used in residential prepaid meters, industry, CNG, electricity, captive (industrial self-generated electricity) be doubled.
However, two responsible officials of BERC told Prothom Alo that an average of 300 crore cubic feet of gas is now supplied to the whole country. Of this, more than 2.3 billion cubic feet (6 percent) comes from its own gas field. Under long-term agreements with Qatar and Oman, liquefied natural gas (LNG) imports account for 17 percent of total supplies. And 5 percent is bought from the international open market as per the need. Although it has stopped buying for the last two months. Stay away from doubling the price of gas in the name of only 5 percent increase in gas price, these two officials of the commission do not see any rationale to increase.
Petrobangla sources say that the crisis in gas supply in the country has started since last month. The crisis is unlikely to end in the next month. The stove is not burning in the house. The factories have to be shut down due to lack of gas. One of the two floating LNG terminals in Maheshkhali has been shut down. The remaining one is not going to meet the required demand. Only 400 million cubic feet of LNG was supplied yesterday. The total supply per day was about 270 crore cubic feet. The country’s gas field has given 2.3 billion cubic feet.
BERC chairman Abdul Jalil told Prothom Alo that the distribution companies did not provide the required information in their proposals and the application for price hike was not appropriate. It has been asked to submit the proposal in accordance with the regulations. After submitting the proposal, the technical committee of the commission will give the evaluation report after checking and selecting it. The commission will then take a decision to take it into account.
It is learned that if the commission takes cognizance, there will be a public hearing on the proposal. The commission will then issue an order on whether to increase the price or not. Earlier in 2006, the commission had rejected a proposal by the distribution company to increase prices by 75 per cent. Since all the companies are in profit, gas development fund is formed without increasing the price. The last time gas prices were increased was in 2019.
Petrobangla officials say that the cost per unit (thousand cubic meters) of gas produced in the country is a little more than two rupees. And now the cost per unit to bring LNG under the long-term contract is 36 rupees. If you want to import from the open market at the current price, the unit cost will be 75 rupees. As such, the distribution company wants to double the average cost per unit.
Petrobangla chairman Nazmul Ahsan told Prothom Alo that importing LNG from the world market now would cost Tk 75.50. In all, the average cost of supplying gas to Petrobangla will be 21 rupees per unit. At present, gas is being sold to customers at an average price of Tk 9 36 paise.
Sources in the Energy Department and Petrobangla say that Petrobangla has deposited hundreds of crores of rupees in the government fund in the last financial year as well. Titas, Karnafuli, Jalalabad, Bakhrabad, Sundarbans and the western region have made profits in the last six years as well. Similarly, the state-owned gas transmission company GTCL has made a profit.
Petrobangla says the distribution company gets commission for selling gas. They have nothing to lose. But in order to ensure gas production and supply, Petrobangla has to calculate profit and loss. If the distribution company cannot make extra income by selling gas, Petrobangla has to get subsidy from the government.
M Shamsul Alam, senior vice-president of the Consumers Association of Bangladesh (CAB), thinks that an anti-people character is working in the energy sector. He told Prothom Alo that the bureaucrats did not insist on gas exploration as there was an opportunity to import LNG. If the price of gas rises after oil, there will be an extreme risk of rising inflation. Therefore, rationing should be done without buying from the open market.
