• Monday, Sep 23, 2019
  • Last Update : 09:48 pm

Consumer groups reject gas price hike proposal at public hearing

  • Published at 10:53 pm March 11th, 2019
Web_Public hearing on proposed gas-Zakir
Petrobangla officials on the Public hearing on their proposal to raise gas price in Dhaka on Monday; March 11, 2019 Syed Zakir Hossain/Dhaka Tribune

Petrobangla cites annual loss of Tk24,540cr in LNG imports as reason for price hike

The much anticipated public hearing of the state-owned Petrobangla on their proposal to raise gas prices began on Sunday with all consumer rights groups opposing the proposal.

The four-day hearing was held at the Bangladesh Energy Regulatory Commission (BERC) TCB Auditorium.

Petrobangla at the hearing cited the import of LNG gas in the near future as the major reason behind them raising prices again to Tk9.55 per cubic meter from the existing tariff of Tk7.17.

An official of the Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) seeking anonymity said: “We want the tariff to be hiked as we have to provide a Tk27,000 subsidy to the gas companies, taking into consideration the 1000 mmcfd LNG import in the near future,” he said. The government currently supplies only around 520 mmcfd of LNG but the price hike is based on the projected import.

About the profit being made by the gas companies, he said: “It is true that they are making a profit now, but that has nothing to do with the import of LNG.”

Between June 11 and June 21 last year, there was a similar hearing, and they finally backtracked from hiking gas prices, taking the “situation” ahead of the 11th general election into consideration.

At the hearing, state-owned Gas Transmission Company Limited (GTCL) placed its proposal to raise the transmission tariff of gas supply as well.

All  consumer right groups and individuals opposed  Petrobangla's proposal asking why consumers are being forced to pay more in anticipation of receiving imported gas.

Referring to the BERC Act, Consumer Association of Bangladesh (CAB) adviser Prof Shamsul Alam said it is totally illegal to hold such a public hearing within the same fiscal year of 2018-19 when the commission passed its order on October 16, 2018.

"You cannot hold such a public hearing by entertaining any proposal on a gas tariff hike while you've already disposed of a similar proposal just October last year," he told the watchdog body.

BERC Chairman Monwar Islam presided over the public hearing while members of the watchdog body were present on the occasion.

Prof Badrul Imam of Dhaka University said the government will have to come to the public hearing every year if it continues to increase the amount of LNG import as per the plan which outlined 4000 mmcfd import in the years to come.

He said it is unfortunate that both neighboring India and Myanmar awarded contracts for offshore gas exploration after the settlement of maritime boundary disputes while Bangladesh miserably failed to do so in the last 5 years.

Communist Party of Bangladesh (CPB) leader, Ruhin Hossain Prince, said leftist parties will build a mass movement against the gas price hike, participating in the hearing, as BERC has lost its credibility as a neutral body.

Chief Coordinator of Bangladesh Gano Sanghati Andolon, Zonayed Saki, also opposed the gas price hike proposal.

Eminent energy expert Prof Nurul Islam said the tariff seting process for both upstream and downstream companies should be transparent and the tariff should be fixed by a public hearing under the BERC.

Cost of LNG import blamed for the price hike

Petrobangla began their hearing at BERC auditorium with a statement about a projected annual loss of Tk 24,540 crore in LNG imports.

Petrobangla in its proposal said the mother body has been purchasing each unit of gas from different upstream gas production companies at an average rate of about Tk6.50, while each unit of LNG will cost Tk39.82.

Petrobangla Chairman Ruhul Amin said they will have to face a huge loss once it starts to import 1000 mmcfd LNG (liquefied natural gas) from April next to meet the country's gas shortage.

He justified the gas hike proposal saying: "So, it's essential to raise the price of gas to offset the loss," the Petrobangla chairman told the public hearing, making his appeal to raise the gas tariff to Tk 9.55 per cubic meter from the existing tariff of Tk 7.17.

Currently, Petrobangla is importing some 500 mmcfd (million cubic feet per day) against a shortage of about 1000 mmcfd, while the current gas supply is 3100 mmcfd.