Bangladesh Energy Regulatory Commission (BERC) evaluation committee unveiled five reasons behind the Gas Transmission Company Ltd (GTCL)’s proposed hike in gas transmission charges.
The reasons are- i) meeting the revenue demand in line with gas transmission tariff methodology, ii) considering the overall situation of the last Fiscal Year (FY), iii) fulfilling the revenue target considering the next fiscal year, iv) importing Liquefied Natural Gas (LNG) and v) considering 0.25% of potential technical losses in the FY2018-19.
BERC’s assessment was revealed at a public hearing on proposed gas transmission charges held at the TCB auditorium in Dhaka on Monday.
The event was organized in three parts- a presentation by GTCL and Petrobangla, followed by a cross-examination session by GTCL by BERC, and concluded with a question/answer session.
Meanwhile, the gas company said growing expenditure, new connections and infrastructural developments are main reasons that forced them to think of increasing transmission fees.
When asked about gas pilferage, officials claimed of no such incident, as gas with immense pressure, is supplied through pipelines.
According to the GTCL, net transmission costs in FY2016-17 stood at Tk0.28 for each cubic metre gas, while the figure was Tk0.21 and Tk0.19 respectively, in the previous two financial years.
Defending their stance, the gas company higher-ups told the hearing that they were eyeing more profit, as no company can sustain itself in the long run if it does not reap profits.
During FY2015-16, GTCL deposited Tk136.8 crore to the national exchequer, but it failed to do so during FY2016-17 as the company registered only a TK12.8 crore profit. It has estimated a loss of Tk118.8 crore in the FY2017-18.
‘Ownership of GTCL must go to the masses’
During the cross-examination, Dr M Shamsul Alam, energy advisor for the Consumer Association of Bangladesh (CAB) said, as GTCL has been declared a limited company, the general public should be share holders.
The government’s ownership of the gas company is contradictory to Article 13 of the constitution, he stated, saying: “100% ownership of the gas company goes to the countrymen.”
According to him, the proposal to hike the gas price will be illogical considering the incomplete infrastructural development for LNG import, the regasification and supply.
He also urged the government to hold Bangladesh Oil, Gas and Mineral Corporation or Petrobangla accountable for various measures including price hike, and revoke laws that give ‘impunity’ to question the state-run oil and gas company.
LNG to weigh on national economy
Energy expert Prof Badrul Imam, during the opening session, said the decision of importing LNG could be inappropriate fuel items are costly.
The country will have to depend on the expensive fuel item as the government would be expanding the import volume of LNG in future, he feared.
“Talks on the LNG issue started in 2010, and has finally arrived after 8 long years,” said Badrul. “In the meantime, the government could have concentrated more on domestic gas production by exploring gas wells, and not relying on LNG now.”
Titas Gas Transmission and Distribution Company Ltd’s appeal for seeking a hike in gas distribution charges and prices at consumer level will be heard from 10am at the same venue today.