Holding public hearings on proposed electricity price increases was wrong on two counts – the halving of international fuel prices and the failure to uphold a legal requirement to precede hearings with open meetings, experts said.
The Consumers Association of Bangladesh, the BNP-led 20-party alliance and the left-leaning parties, all requested the Bangladesh Energy Regulatory Commission (BERC) not to hold the hearings in light of falling international oil prices.
The oil price is now at $58 per barrel, down from highs of $147 per barrel.
“BERC violated the law in holding the public hearings on electricity tariff increase proposals, without first holding an open meeting,” Professor Samsul Alam, adviser to the Consumers Association of Bangladesh, told the Dhaka Tribune yesterday.
Samsul said: “The downward trend of fuel prices means the production cost of power generation is supposed to decrease. So the price of electricity should decrease.”
He said according to the BERC Act, the commission is bound to hold an open meeting.
“The open meeting has been skipped to save time,” BERC Chairman AR Khan said.
After receiving proposals from the power distribution companies, the Bangladesh Energy Regulatory Commission (BERC) is required to hold an open meeting with stakeholders to decide whether or not to approve the proposals.
After that, they hold a public hearing to decide whether or not to change the tariffs.
The hearing, held from January 20 to 25, discussed proposals submitted by five state-owned electricity distribution companies to raise retail power tariff rates by between 17.45% and 25.89% per unit (each kilowatt-hour).
During the hearings, the technical evaluation committee of the BERC recommended against raising power tariffs at the consumer-level by any distribution company.
“Current oil prices have come down to less than $60 per barrel. There is no justification to discuss a price hike,” Chief Coordinator of Gonosanghati Andolon Zonayed Saki said.
The Power Development Board’s proposal claimed that since the government had opted to import fuel oil to generate power, this has added to the PDB’s financial burdens.
If the government agreed to a subsidy of around Tk6,000cr this fiscal year, there would be no need to hike bulk electricity prices, PDB officials said.
The BERC evaluation committee said if bulk tariffs were not increased, retail prices need not be increased either.
But on January 20, Planning Minister AHM Mostafa Kamal said despite the drop in international oil prices, the government will not reduce its price.
The minister said this in reply to a question from lawmaker Haji Mohammad Selim in a question-answer session of parliament.
The country’s state-owned lone fuel oil importer, Bangladesh Petroleum Corporation, is expected to benefit from the dramatic fall in global oil prices.
Bangladesh mainly procures gas oil, diesel, and furnace oil to feed expensive power plants.
Kamal said the government has incurred a loss of Tk7,000cr per year when the price of oil was at its peak.
If the price continues at this lower level, the government will make a profit Tk14,000cr. After recovering earlier losses, the government will consider reducing oil prices, he said.
