In spite of almost a decade of its existence, Bangladesh Energy Regulatory Commission (BERC) is yet to formulate the regulations for fixing retail prices of petroleum products due to the energy ministry’s unwillingness.
The BERC act was passed in 2003, and it started fixing the retail and bulk prices of electricity and gas since September 2008 and August 2009.
However, since the middle of 2008, the price of fuel has been increased six times and decreased twice by the executive order of the energy ministry, a job supposed to be done by the BERC.
Once the regulations are in place, the BERC would be able to fix fuel oil prices through public hearing as the BERC Act 2003 stipulates. In the absence of the regulations, the energy ministry retains the authority, which is an indirect violation of the BERC Act.
According to the BERC officials, the first proposal to formulate the regulation was sent to the ministry in July 2012, but is yet to be framed.
The drafts of the Petroleum Products Retail Tariff 2012, the Petroleum Products Storage, Marketing and Distribution Tariff 2012, and the Petroleum Products Transmission 2012 were sent to the energy ministry for vetting by the law ministry in July last year.
The draft was discussed at a meeting on July 22 that year, with Power, Energy and Mineral Resources Minister Muhammad Enamul Huq.
At the meeting, Bangladesh Petroleum Corporation (BPC) Chairman Md Eunusur Rahman said the government provided the BPC for the deficit in the petroleum price either as subsidy or as loan. Because of this, the BERC’s regulations of petroleum products will not be suitable for the BPC.
It was also decided at the same meeting, that as there is an existing executive order on the administered petroleum price, the regulation requires further assessment, which will be sent to the energy and mineral resource division.
On May 14, a letter signed by the BERC Secretary Abdul Khalek read that their needs to publish a gadget according to the Commission Act and other procedures. It is recommended to take all the necessary steps to verify the act by the ministry of law.
It is mentionable, according to section 34 (1) of the BERC Act 2003, “notwithstanding anything contained in any other law for the time being in force, the price of power generation in wholesale, bulk and retail, and the supply of energy at the level of end-user, shall be determined in accordance with the policy and methodology made by the Commission in consultation with the government, provided that this shall not be applicable in those cases, the tariff of which were determined by the agreement executed between the private company and the Government or by any of its agency before this Act comes into force.
Section 34 (3) Commission by regulation shall make methodology for determination of tariff.”
As per the law, BERC is to control, regulate and fix the tariff of the power, energy and all petroleum products in the country.
But, the government has raised the fuel oil prices recently through executive orders. This has violated Section 27 of the BERC Act 2003.
The government did not follow the usual practice on earlier occasions as well. Executive orders were issued to change fuel oil tariff. BERC, as an independent and neutral institution, was never allowed to act on its own.
On February this year, the Consumers Association of Bangladesh (CAB) sued the energy ministry and the energy commission challenging the latest hike in fuel prices, which was made effective on January 4.
The association filed a petition with the High Court in this regard.
Earlier in January this year, the government raised the prices of diesel and kerosene by Tk7.0 per litre, and octane and petrol by Tk5.0 per litre.
Diesel and kerosene are now sold at Tk68 a litre, while octane is Tk99 and petrol sells at Tk96 a litre.
When contacted, CAB’s Energy Adviser Prof M Shamsul Alam told the Dhaka Tribune: “We went to the High Court after knocking the door of BERC and energy ministry about the fuel price regulations. Now, we are waiting for the decision of the court.”
Member of BERC, Salim Mahmud told the Dhaka Tribune that: “We once again sent the draft to energy ministry for law ministry’s vetting and it will be an easier task for us to formulate the regulations as soon as the government take steps.”
Secretary of Energy Division Md Mozammel Haque Khan, however, said, there is no barrier from the ministry in formulating the regulations and they already analysed the BREC draft and it will be sent to law ministry soon for vetting.
