The New Nation - Internet Edition

UNB, Dhaka

Bangladesh Energy Regulatory Commission (BERC) yesterday accepted a gas price-hike proposal placed by Petrobangla, subject to eliciting public opinion about the raise.

Now, a public hearing on the issue will take place on September 15, 2008, and before that, any interested individual or organisation can enlist their names with the BERC by July 30 to participate in the hearings.

BERC Chairman Ghulam Rahman said if the Petrobangla could justify its price-hike proposal in the proposed public hearing, only then the commission would allow it to raise the fossil-fuel price.

"We'll allow Petrobangla only to raise price at that level which it could justify in the public hearing, otherwise we'll not allow," he told journalists after an open discussion on the gas price-hike issue at the BERC office, where Petrobangla made its presentations.

In the proposal, which came hot on the heels of hike in prices of petroleum fuels, the state-owned hydrocarbon and mineral resources corporation suggested a variable price hike for its different categories of consumers.

As per the proposal, Petrobangla, for domestic consumers, suggested raising gas price to Tk 600 from the existing rate of Tk 400 for a double-burner oven while Tk 550 for single-burner oven against the present rate of Tk 350.

The proposal is for a 50 percent rise over the existing rates for domestic gas users.

The metered domestic consumers will have to pay Tk 208 instead of Tk 130 with a

price increase of 26.81 percent. Similarly, Petrobangla proposed to raise gas price for commercial users by 26.08 percent, meaning that per-unit (1000 cubic feet or 1 mcf) price will go to Tk 291.59 from the current price of Tk 233.12.

For the industrial consumers, Petrobangla proposed to re-fix per-unit gas price at Tk 182.25

instead of present rate of Tk 148.13, with a rise of 23.03 percent.

The same rate will apply to the tea-estates.

For captive power plants, the new rate is proposed to be Tk 182.25 per unit, up from the present rate of Tk 105.59, by a 72.60 percent raise.

The Petrobangla proposed Tk 93.73 per-unit gas price for the Power Development Board (PDB), independent power producer (IPP) and small power plant (SPP) instead of Tk 73.91--a 26.81 percent raise.

For fertiliser industries, the new rate is envisaged to be Tk 93.73 instead of Tk 63.41 per unit by a raise of 47.81 percent.

BERC fixed September 8 for submission of arguments and counter-arguments against and for the gas-price hike for those who want to participate in the public hearings. After the open hearings, BERC would make its decision within 30 days.

Presenting the price-hike proposal, Petrobangla Chairman Jalal Ahmed said his organisation's cumulative deficit on account of international gas companies (IOCs) is about Tk 2000 crore.

"If we don't raise gas prices, Petrobangla will have to go bankrupt shortly, which will ultimately make it unable to go for further exploration," he said to justify the merit of the government move in the interim period.

He said Petrobangla would sit with the business community separately to discuss the urgency of the price hike.

Former Dhaka Chamber president Aftab Ahmed, who represented the business community, told the meeting that gas prices could be raised since worldwide prices of oil and gas were increased. "But it must be rational, maintaining a tolerable level."

A PDB representative said if Petrobangla raised gas prices, then it would add the additional prices to its price-hike proposal that remained pending with the BERC.