Fertiliser and power sectors braced for huge rises as consumers set to be spared cost of adjusting to LNG imports
Bangladesh industry may see a fresh hike in the price of natural gas this month as the government looks to offset the cost of importing reserves from abroad to meet the country’s energy shortage.
According to the Bangladesh Oil, Gas, and Mineral Corporation, better known as Petrobangla, Bangladesh currently faces a shortage of 1 billion cubic feet of gas a day (bcfd) against an overall demand of around 3.7 bcfd.
Considering the situation, the government signed a deal with Qatar to import 2.8 million tons of liquefied natural gas (LNG) annually for the next 15 years.
The first shipment of LNG from Qatar arrived at Moheshkhali on April 24 and was added to the national energy mix on August 18, as consumers in the Chittagong region started receiving the re-gasified super chilled fuel.
Although the current production cost of each cubic foot of gas is Tk9.55 after taxes and VAT have been added to the figure, the government only charges Tk7.39 at the consumer level.
To help pay for the imports, the seven gas companies submitted proposals for hikes in gas prices earlier this year, although they exempted residential and commercial users from any increases.
Instead, the fertiliser and power sectors are set to take the brunt of the proposed hikes, with the gas companies advocating for rises of 372% and 206% respectively.
The Bangladesh Energy Regulatory Commission (BERC) held a public hearing on the proposals of the gas companies and Petrobangla at the TCB auditorium in Karwan Bazar, Dhaka between June 11 and June 22.
If the proposed increases are accepted, the price of each unit of gas for the power sector will shoot up from Tk3.16 to Tk10, and for the fertilizer sector from Tk2.71 to Tk12.80.
It has also been proposed that the prices for the industry and CNG sectors be hiked by 93% and 25%, respectively.
Kamruzzaman, a member of the technical evaluation committee formed during the mass hearing, said the process to agree the new gas prices is nearing an end.
“After the National Board of Revenue issues an SRO (Statutory Regulatory Order) in this regard, the BERC will announce new prices,” he said.