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Businesses voice concerns about impending gas price hike

  • Published at 12:44 am November 25th, 2018
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Stakeholders, including consumers and policymakers speak at a seminar titled LNG Tariff: Implication on Trade and Industries, organised by DCCI at its office in Dhaka on November 24, 2018 RAJIB DHAR/Dhaka Tribune

Fingers pointed at BERC for inaction

Stakeholders and leaders of several business organizations yesterday voiced their concern against the possible gas price hike, alleging that the Bangladesh Energy Regulatory Commission (BERC) hardly pays heed to their complaints.

The energy regulatory body serves the interest of the government in most cases, with the latter remaining silent despite repeated allegations against corrupt gas company officials, they claimed.

They were addressing a seminar on LNG Tariff: Implication on Trade and Industries, organized by the Dhaka Chamber of Commerce and Industry at its office in Dhaka yesterday. 

Md Shahidullah, vice president of Bangladesh Cement Manufacturers’ Association, said they fear huge losses if gas prices are hiked to adjust the prices of imported Liquefied Natural Gas (LNG).

“Despite raising the annual production capacity to 60 million tons in the last ten years, we are using only 50% of the capacity due to high competition in the market,” he said.

If gas prices are aised exorbitantly, it will take a heavy toll on the cement industry he feared, urging the government to adjust prices to a permissible limit. 

Almost half the 67 cement factories were shut down since 1996 and the number may increase due to a highly potential gas price hike, he said.

Zahirul Hoque Chowdhury, vice chairman of Bangladesh Auto Re-Rolling and Steel Mills Association, said infrastructure development will be badly affected owing to any upward price adjustment.   

“Not just us, but our customers will also bear the brunt if the price shoots up,” he maintained, adding it is the government’s responsibility to ensure a business-friendly environment for  smooth economic growth. 

Bangladesh Textile Mills Association director, Razeeb Haider, said Bangladesh being the biggest importer of cotton will face a debacle in its primary textile sector since increased gas prices will squeeze its competitiveness. 

According to him, the government should have a long-term policy for gas price hikes so industries and their supply chains operate smoothly.

Razeeb also demanded an incentive to be announced for power tariffs. 

M Shamsul Alam, energy adviser of Consumers’ Association of Bangladesh (CAB), said he personally approached the BERC with some issues, but got no positive response.

“Finally, I moved to the courts o resolve my problems,” he said, urging business leaders to hold talks with the government to stop the anomalies and fix issues prevailing in the power and energy sector.

The CAB adviser said the government turned a blind eye to those accused of massive irregularities of several gas companies, significantly, Titas Gas Transmission and Distribution Company.

Energy expert Dr Badrul Imam said the more LNG the government imports, the pricier it will become.

He accused the government of negligence in exploring gas wells onshore and offshore, while resorting to expensive LNG as the major solution to the growing gas crisis in the country.  

Mohammad Hatem Ali, first vice president of Bangladesh Knitwear Manufacturers and Exporters Association, also expressed his resentment of the BERC, saying it holds mass hearings only as eyewash.  

Presenting the keynote paper, former power secretary Dr Muhammad Fouzul Kabir Khan suggested gas prices be hiked reasonably.  

He recommended the LNG contracts signed so far be made public in order to help set a reasonable price by adjusting imported fuel oil prices.

Industrialists will not be affected by an increase of Liquefied Natural Gas (LNG) prices if they raise energy efficiency, properly use electronic volume corrector (EVC) metres and check gas pilferage, said Md Abul Kalam Azad, principal coordinator of SDG Affairs at the Prime Minister’s office. 

“Industrialists will have to augment energy efficiency at their factories. There is of course gas pilferage, which needs to be reduced. The use of EVC metres has to be ensured. Only then they will feel comfortable even after an LNG price hike,” he said.

Insisting on skill development of workers in industries, Azad said a balanced energy price is also needed to help maintain the ongoing trend of economic growth in the country. 

Talking about the allegations against his office, BERC Member Rahman Murshed said they always take the complaints and suggestions of all stakeholders and complainants into account. 

He said the security of power and gas supply, and their price issues are two major factors to ensure smooth growth.

Gas prices have to be fixed keeping economic growth sustainability in mind, he observed, calling for more gas exploration. 

The government on October 16 retreated from raising gas prices, after a long discussion and examination in this regard to adjust expensive imported LNG prices.  

The gas regulator then said the decision was taken in order to ward off any political repercussions ahead of the general elections.

Earlier, all eight state-owned gas companies had appealed to the BERC, seeking an average 75% hike on existing gas prices for diverse consumer groups.

The BERC held public hearings on the proposals of gas companies and Petrobangla at the TCB auditorium in Dhaka between June 11 and June 22.