Petrobangla proposed to BERC a gas price hike for new industrial connections and captive units, aiming to address subsidy costs and manage financial challenges in the energy sector.
Bangladesh Energy Regulatory Commission (BERC) Chairman Jalal Ahmed confirmed this information to Dhaka Tribune on Tuesday evening.
He said: "We have received a letter from Petrobangla. Discussions are underway on this matter. Just because we say we will increase the price, it cannot be increased. There is a long process. BERC cannot take this decision alone, so the six gas distribution companies will also have to be sent this proposal. Then discussion will be held with them. Later, discussions will be held on how reasonable the gas price increase is and how much the price will be increased. Then, the new gas price will be determined through a public hearing."
Earlier, according to a letter signed by Petrobangla General Manager (Accounts) Abdul Jalil sent to BERC on Monday, it has been proposed to increase the price of gas per unit in the industrial sector by almost two and a half times from Tk30.75 to Tk75.72 with the approval of the Energy Department.
On the other hand, in the case of potential new gas connections in the captive category, the total cost of LNG import for consumers is the current price of natural gas at Tk31.50.
Petrobangla's proposed price is Tk75.
The proposal says that for new connections, the entire gas bill will be at the new price.
For existing customers, 50 percent will be at the new price and 50 percent at the old price.
On the other hand, in the industrial and captive sectors, customers will have to pay a charge of Tk75.72 for excess usage over the permitted load.
The current price is Tk30 for the industrial sector and Tk31.50 for the captive sector.
For this reason, existing customers in the industrial and captive categories have been asked to submit monthly statements (July 2024 to September 2024) detailing their gas consumption in excess of the permitted load.
What Petrobangla says
The letter mentioned that the demand for natural gas in the country is constantly increasing at a huge rate.
But it is not possible to increase the supply of gas according to the demand.
As a result, there is a huge gap between the current demand and supply of gas.
The permitted load in 8 consumer categories is about 5,356 and against it there is a demand of about 3800-4000 MMCFD of gas.
Against the demand, it is possible to supply an average of about 2800-3000 MMCFD of domestically produced gas and imported LNG.
There is an average daily deficit of about 1000 to 2000.
In the 2023-24 fiscal year, it has been possible to supply an average of 2,493 MMCFD of gas against the normal demand of 3800-4000 MMCFD in 8 consumer categories.
Domestic gas production accounts for about 75% of the gas supplied and imported LNG accounts for about 25%.
In the future, domestic gas production may gradually decrease and LNG imports will increase, which will stand at about 75% of the total gas supply in the fiscal year 2030-31.
Meanwhile, the current import price of LNG per cubic meter is about 65-70 taka.
As a result, the gas price gap will have to be reduced to sustain this sector.
As domestic gas production decreases over time and high-priced LNG imports increase over time to meet gas demand, the 2024-2025 fiscal year will see a decline of 31%.
If 28 more cargoes are imported under long-term contracts and 29 more from the spot market from January 2024-2025 to June 2025, totaling 57 cargoes, i.e. a total of (48+57) = 101 cargoes, the estimated deficit will be Tk16,162.71 crore.
And if 115 cargoes of LNG are imported in 2025, there will be a deficit of about Tk22,315 crore according to the current gas price, which will have to be subsidized.
This deficit reduction will primarily be achieved through the repricing of existing gas prices in the industrial and captive categories, as promised and potential new gas connections and load increases, Petrobangla claimed in the letter.
