Gas price hike unlikely anytime soon

Dhaka, Oct 9 (UNB) – Bangladesh Energy Regulatory Commission (BERC) is now going slow with its move to increase gas prices in the country.

BERC was long waiting for a government decision on supplementary duty (SD) waiver on import of pricey liquefied natural gas (LNG) and has been planning to raise gas prices upon calculating the SD waiver implications.

Though the energy regulator has received the SD waiver SRO (statutory regulatory order) from the National Board of Revenue (NBR) last week, it’s now weighing the pros and cons of the timing of the gas price hike decision, especially just ahead of the upcoming national election.

BERC sources told UNB that after the receipt of the SRO, top bosses of the energy watchdog body received some advices from the Prime Minister’s Office that prompted them to rethink about the announcement of the gas price hike.

However, BERC Member Mizanur Rahman said the regulatory body is now recalculating the issue relating to gas price adjustment.

“We’re passing through a critical time. So, it may take some more times for BERC to announce its decision”, he told UNB on Monday.

Energy sector insiders believe that the things are getting delayed as the BERC is now going slow on its price hike decision to avoid any political repercussion ahead of the national election due in December-January.

Secondly, they said, gas price is a very sensitive issue which always has a multiple effects on different sectors. Any decision from energy regulator on gas price will have a big implication on the overall economy, which is not expected in such a situation, said an energy sector insider.

Earlier BERC was preparing to announce its decision following the public hearing on gas price proposal placed by different state-owned gas marketing and distribution companies.

The move of the regulator comes at a time when government started supplying high-cost imported LNG in national gas network to supplement the locally produced gas since August this year. Per unit (thousand cubic feet or mcf) LNG costs USD 11 as against locally produced gas price of only USD 2.9 per unit.

All the 8 state-owned downstream entities in gas sector – six distribution companies, one transmission and an LNG marketing company – had appealed to the BERC seeking an average 75 percent hike on the existing gas prices for different consumer groups except the household and commercial ones.

The upward price revision was sought for industrial consumers, power plants, fertilizer factories, captive power plants, and CNG refueling stations.

The distribution companies are Titas Gas Transmission & Distribution Company Limited (Tatas Gas T&D), Bakhrabad Gas Distribution Company Limited (BGDCL), Jalalabad Gas Transmission and Distribution System Limited, Pashchimanchal Gas Company Limited, Karnaphuli Gas Distribution Company Limited and Sundarbans Gas Company Limited (SGCL).

While participating in the hearing, the gas entities argued that as per the government decision they had to submit their respective price hike proposals because of the high import cost of LNG as it will push up their cost substantially.

The Petrobangla started supplying the imported LNG to national gas network from August 18 through re-gasification by private sector-operated floating storage and re-gasification unit (FSRU).

Officials said currently 300 mmcfd gas is being supplied from LNG and it will go up to 500 mmcfd in a month or two and then 1000 mmcfd gas will be flowed from next year as per a government plan.

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