The New Nation - Internet Edition

Staff Reporter

Government is going to increase the retail price of gas, including the Compressed Natural Gas (CNG) within this month to bring it closer to international levels as well as a measure to ease pressure on state gas firms.

Chief Advisor's Special Assistant for Power, Energy and Mineral

Resources Ministry Dr M Tamim announced the caretaker government's decision yesterday on the latest raise in the price of the fossil fuel at a meet-the-press function at the National Press Club in the capital.

"The prices of CNG will be raised in accordance with the international prices of natural gas and other fuel oil," said the special assistant to the head of the interim Government for the Energy Ministry. He was addressing the conference as chief guest. The price of CNG would be doubled from the present per cubic metre rate of Tk 8.5, he added.

Tamim said the government had agreed to raise prices as people were getting CNG at almost cost price compared with petroleum products. Petrol prices nearly doubled in April 2007.

"In terms of value, the price of CNG is almost 5 to 6 times lower than that of petrol and octane," said Dr Tamim.

Officials said that the number of CNG-run vehicles in the country is about 200,000 of which nearly 70 per cent are private cars owned by people in the high-income group.

"So ultimately the benefit of the subsidised price of CNG is going to the affluent people," he added. After the price rise monthly losses of state-run Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) might be offset by nearly Tk800 million, he said.

This year, he mentioned, the government has so far allocated Tk700 crore for petroleum import and the rest of the money would have to be borrowed from banks.

The CNG was first introduced in the country in 1985, beginning with Dhaka, under the state-owned RPGCL when its price was Tk 7.45 per cubic metre. At the time, the price of per-litre octane was about Tk 10. For the following 20 years, the CNG price remained static.

In 2000, the use of CNG as motor fuel got momentum with the government having encouraged private sector to get involved in CNG business by installing conversion plant and setting up re-fuelling station.

Because of very cheap price, compared to liquid fuels like diesel, petrol or octane, CNG became a very popular fuel for motor vehicles of the middle class.

Dr Tamim however blamed the previous BNP Government's administrative failure for the present power crisis across the country.

"The only reason for the failure in power generation was administrative failure as there was money, there was gas, but there was no decision," he said.

He said in the last one year about 100 MW electricity was added to the national grid through repair of old power plants. He also forecast that in the coming irrigation season, the country would face 500-800MW power shortages.

Reaffirming the caretaker government's plan to complete the 3rd-round gas-block bidding, he said that in the last 10 years, there had been no drilling in the country for gas exploration, excepting one or two in Bibyana gas field.