Bangladesh Energy Regulatory Commission
BPDB submits review appeal to raise bulk power tariff
State-owned Bangladesh Power Development Board (BPDB) has filed a review appeal to the Bangladesh Energy Regulatory Commission to raise the bulk power tariff.
“We’ve filed an appeal to the BERC on Monday (November 14) to review the decision to reject the proposal to raise bulk power tariff”, a top BPDB official told UNB on condition of anonymity.
He said before submitting the proposal, the BPDB received a nod from the government’s highest policy level.
Read more: Decision on bulk power tariff ‘adjustment’ Thursday
State Minister for Power, Energy and Mineral Resources Nasrul Hamid also approved the review appeal, he added.
BERC on October 13 rejected the proposal of the BPDB to raise bulk power tariff, saying that the aggrieved party can submit appeal proposal to review the regulator’s decision within 30 working days.
“Keeping compliance with the 30-day tenure, we’ve submitted our review appeal”, said the top BPDB official.
A top official of the BERC also confirmed that it had received the appeal from the BPDB.
He said the BERC top level is now scrutinising the appeal proposal.
“But it’s not clear whether BERC will hold a fresh public hearing on the review or will arbitrarily accept the proposal and announce its decision without hearing”, said the BERC official preferring anonymity because of the sensitivity of the matter.
Read more: Bulk power tariff hike could be announced within Oct 14
While delivering a decision by rejecting the BPDB proposal on Oct 13, BERC chairman Abdul Jalil said that some of the private companies, which buy power from BPDB have not submitted their data of transactions.
“There was data ambiguity. That’s why we did not analyse the impact of any rise in bulk tariff on the consumers,” he told reporters.
The current socio-economic and power supply situation were taken into consideration when making the BERC decision, he noted. As a result, the electricity tariff remains unchanged in accordance with the earlier tariff announced in February 2020.
The last public hearing on a proposal of the state-owned BPDB to raise bulk power tariff was held on May 18.
The BPDB placed a proposal to raise bulk power tariffs by 65.57 percent at the public hearing while a technical evaluation committee of BERC recommended a 57.83 percent hike.
Read more: BERC’s TEC commends a 57.83pc hike in bulk power tariff rejecting BPDB’s 65.57pc
Placing the proposal, BPDB officials had said the organisation will require Tk 74,189 crore in revenue to generate 88,993 million kilowatt hours (units) of electricity to supply to the power distribution companies.
"But if the BPDB sells its electricity at the existing rate of Tk 5.17 per unit, it will have to face a deficit of Tk 30,251 crore in revenue in the calendar year 2022. So, BPDB needs to raise the power tariff by 65.57 percent to Tk 8.56 per unit from Tk 5.17," said a BPDB top official at the hearing, adding that this has been calculated without the government's subsidy.
The Power Division has been under tremendous pressure from the Finance Ministry to raise power tariffs.
BPDB has been incurring a huge financial loss due to its purchase of electricity from private power plants at a much higher rate and sell it to the consumers at a lower rate.
At the public hearing on May 18, consumer rights groups, including representatives from different business bodies, vehemently opposed any major rise in power tariff right now, as people are already struggling with high inflation caused by high commodity prices.
They termed the proposal illogical and said BPDB can offset its revenue deficit through addressing irregularities, corruption and unethical practices in buying electricity from inefficient private power plants at higher rates.
New price of 12kg LPG, increases by Tk 51 to Tk 1251
Price of liquified petroleum gas (LPG) has increased by Tk 4.25 per kg to Tk 104.26 from previous rate of Tk 100.01 per kg as the Bangladesh Energy Regulatory Commission (BERC) on Wednesday (November 02, 2022) announced the new value of the petroleum gas for the month of November. As per the new price, a retail consumer will get a 12-kg LPG cylinder at Tk 1251 instead of previous price of Tk 1,200.
The prices of LPG for other sizes of cylinders from 5.5 kg to 45 kg will go up rationally, said BERC chairman Abdul Jalil, who announced the new price at a virtual press briefing.
Read more: LPG could be ready solution to energy problem for industries: Speakers As per the announcement, the price of auto gas (LPG used for motor vehicles) was increased too to Tk 58.28 per litre from previous price of Tk 54.33 per litre, up by Tk 3.95 per litre. The new price will be effective from 6 pm on Wednesday (Novemer 2). Jalil informed that the US Dollar rate was considered at Tk 106.25 in refixing the price of the LPG as private operators import it from Middle East through foreign currency.
Read more: MoU signed for movement of Indian POL, LPG carrying vehicles through Bangladesh He said though the LPG price has substantially come down in the global market, consumers are not getting full advantage of the downward trend due to the high dollar price in the local market. Last month, the dollar exchange rate was considered Tk106.64.
The price of LPG, marketed by state-owned LP Gas Company, will remain as usual as it is locally produced with a market share of less than 5%.
Read More Omera launches online system to provide doorstep delivery of LPG to customers in Dhaka The LPG price went up to the highest Tk1,439 (a 12kg cylinder) in the local market, following the start of the Russia-Ukraine war in February this year. The LPG price in Bangladesh was the lowest at Tk1,225 for a 12kg cylinder in January this year and it witnessed continuous hikes in February, March and April.
BERC orders Petrobangla to return Tk 12,227 cr to ESF and GDF funds
Bangladesh Energy Regulatory Commission has directed state-owned Petrobangla to return Tk 12,227.44 crore to its two original funds—the energy security fund (ESF) and the Gas Development Fund (GDF).
The energy regulator’s latest directive which came as the BERC Order No-2022/7, in detail, was released on June 27 and uploaded on its website on the same day.
However, BERC gave its brief order on June 4 raising gas prices by average 23 percent at retail consumer level.
Also read: Petrobangla to scrap compensation clause in future gas pacts?
As per the BERC Verdict, the Petrobangla has to now return Tk 9227.44 crore to ESF Fund and Tk 3000 crore with interest to the GDF fund which the organization had taken away and used for different purposes.
The verdict did not dictate a specific date for the Petrobangla as to when it has to return the funds.
The order came as a follow-up of the public hearing on gas prices held on March 21 in the city’s BIAM Auditorium where different consumer right groups, including Consumers Association of Bangladesh (CAB) termed the ESF and GDF fund as consumers’ money which they paid in addition to their bills for gas field development and security purposes.
But the Petrobangla used some of the funds for different other purposes while deposited to the government exchequer as per a Finance Ministry order.
The CAB and other right groups pleaded with the BERC to return the amount to the original funds and ensure its use only for gas field development and the gas sector’s security purpose through a transparent way which will be monitored by consumers representatives.
CAB Vice President M Shamsul Alam welcomed the verdict and said that now an obligation has been created on the part of the Petrobangla to return the fund.
Also read: Proposed gas price hike: Petrobangla under fire at public hearing
He said if Petrobangla does not abide by the BERC order, the regulator can punish or fine the responsible officials of Petrobangla for violating the verdict
He said if the Petrobangla fails to fulfill its legal obligation, the CAB will move the court to force the organization to implement the order.
Public hearing on proposed hike in bulk power tariff May 18
Bangladesh Energy Regulatory Commission (BERC) will hold public hearing on a proposal for raising electricity tariff at bulk level on May 18.
The state-run Bangladesh Power Development Board (BPDB) moved the proposal last month urging the energy regulator to set the bulk power tariff at Tk8.58 instead of existing 5.17 per kilowatt hour (each unit).
The BERC in public notice informed that the public hearing will be held at Biam Auditorium in the city from 10.30 am to 5 pm on May 18.
Also read: Proposed gas price hike: Petrobangla under fire at public hearing
It also requested the interested parties and individuals who want to participate in the hearing to send the opinions in written by April 28 and enlist their names for the hearing.
The BPDB claims in its proposal to the energy regulator that it will incur a loss of Tk 30,251 crore in the current fiscal year if the bulk tariff is not raised.
It attributed to the increasing fuel cost and other soaring expenses for financial losses saying that the production cost of electricity has gone up to Tk 4.24 per unit in 2022 from Tk 2.13 in the fiscal year 2019-20.
Power industry insiders said that it is obvious that if the bulk electricity is raised, it will ultimately push up the tariff at retail level. Any rise in bulk tariff will be applicable for the power distribution companies as they are the bulk consumers.
They buy electriocity from BPDB in bulk and then sell it to the public at retail rates. So, the public hearing on retail tariff will come consequently, said an industry insider.
Also read: Public hearing on LPG pricing postponed again
All the state-owned power distribution companies have already submitted their respective proposals to the BERC to raise the power rates at retail level.
But this time, the BERC is going to hold public hearing on bulk tariff proposal keeping pending the request for raising retail price.
BERC member Syed Mokbul-e-Elahi Chowdhury said the it wants to first settle the bulk tariff proposal.
“This time we want to keep the hearing only on the bulk tariff proposal... the issue of retail tariff will be settled later by the commission”, he told UNB.
Govt working to keep gas price within tolerable limit: Nasrul
State Minister for Power, Energy and Mineral Resources Nasrul Hamid has said the government is working to keep the gas price within the tolerable level of people.
“We’re watchful so that any rise in gas price doesn’t create public discontent,” he said while talking to reporters during a visit to Titas Gas Company’s Tikatoli Zonal office in the city on Sunday.
He said it is the responsibility of the Bangladesh Energy Regulatory Commission (BERC) to assess the proposals of gas distribution companies and make its order on the issue.
Also read: Defying rejection, Petrobangla, 7 other distributors again push for gas price hike
The remarks came against the backdrop of the recent move by the state-owned company to raise gas prices.
They separately submitted their respective proposals to the BERC.
If the BERC accepts the distributors’ proposals, the monthly gas price for a double-burner will rise to Tk 2,100 from the existing Tk 975, while the price for a single-burner to Tk 2,000 from the current Tk 925.
Nasrul Hamid said the government has initiated measures to increase the economic use of gas as well as create public awareness about it.
He said gas exploration activities are going on as the Bangladesh Petroleum Corporation incurs a loss of Tk 10 crore a day as it has to import petroleum at a much higher price from the international market.
Also read: Consumers brace for a big hike in gas price amid dwindling supply
The state minister expressed dissatisfaction over mismanagement of files at the office and asked the officials to introduce an automation system as soon as possible.
'Unacceptable': Opinion almost unanimous in rejecting proposed gas price hike
Speakers at a discussion meeting on the country's 'gas crisis' -dwindling reserves met with increasingly expensive imports - trashed a proposed price hike sent to the energy regulator by the state-owned gas distribution companies for drawing on erroneous assessment.
“The proposal to hike the gas price by 117 percent is abnormally high, and cannot be acceptable to justify only 5 percent import of gas at higher price from the spot market” said Mizanur Rahman, a former member of the Bangladesh Energy Regulatory Commission while discussing the issue.
Energy and Power, a fortnightly publication on arguably the most vital sector of the economy for any developing nation, organised the virtual discussionSaturday on “Gas Crisis & Price Hike Move, Challenges of Industrial Sector '' with its editor Mollah Amzad Hossain as moderator.
The seminar was also addressed by the eminent economist and executive director of the Policy Research Institute Dr Ahsan H Mandur, energy expert Dr Ijaz Hossain, former president of Dhaka Chamber of Commerce and Industry Abul Kasem Khan, FBCCI Standing Committee on Power and Energy Chairman Humayun Rashid and chairman of Forum for Energy Reporters Bangladesh (FERB) Arun Karmaker.
BERC recently rejected a proposal put together by a number of state-owned gas distribution companies to raise the gas price by 117 percent in accordance with the energy division’s instruction.
According to gas industry insiders, of the country’s total gas consumption, 78 percent is still locally produced from the country's own reserves, while 17 percent is imported on G2G (government to government) contracts that have a long-term price locked in.static price while only 5 percent is imported from a volatile spot market.
Mentioning the proposal, former BERC member Mizanur Rahman said the regulatory body rightly rejected the proposal. “The proposal was based on a wrong assessment,” he added.
He, however, said the taxation part is separated from the total price, the enhancement could be by between 60-70 percent which is also unacceptable in the current structure of the gas market.
Dr Mansur said there was no long term strategy pursued for the country’s energy sector and the current situation is a result of that negligence.
“This is now forcing the government to go for import of gas from the global market at a higher price,” he observed.
This is a big failure that we could not diversify our energy basket and now we have to depend on import of gas for energy use, he said.
Professor Ijaz Hossain said it is a big question why the government did not move for exploration and preferred for import of gas at a higher price from the global market.
He said it is a wrong strategy to use local gas to produce fertilizer while gas is being imported for power generation.
Abul Kasem Khan said industries would inevitably bear the brunt of any price hike in the energy sector, and it may indeed pose a challenge, or even stand as an obstacle, to what everyone hopes will be a rapid and sustained recovery for the economy in the post-Covid period.
The scion of the AK Khan Group therefore views any move to raising the gas price at the moment as the 'wrong strategy'.
"The numbers being talked about would raise cost of production by upto 15 percent on average, across all sectors. That's not what you want when you're looking at your locally made products to compete in the international market, and hopefully secure some large orders for export," said Khan.
Humayun Rashid, who is better known as the managing director and CEO of Energypac than his role with the FBCCI, was unequivocal in his assessment of what effect an actual hike even close to what has been proposed to BERC would have: "It would create a bottleneck in the efforts to create the new jobs that will be necessary to accommodate all of those workers who will be looking to re-enter the active workforce. On the other hand, not hiking the price of gas would contribute more to the economy by pushing up the overall level of employment to pre-pandemic levels and hopefully beyond."
Arun Karmaker, a former special correspondent at Prothom Alo where he covered the energy sector for many years, blamed any crisis that could be forthcoming in the country's hydrocarbons sector as the inevitably bitter fruit of a longstanding culture of corruption and inefficiency that prevails even today.
Retail LPG price declines by Tk 85 in 12kg container
The price of private operators’ liquefied petroleum gas (LPG) has been decreased by Tk 85 to Tk 1228 per 12-kg container from Tk 1313 with effect from 6 am Friday (Dec 3) at the retail level.
Bangladesh Energy Regulatory Commission (BERC) announced the new price at a press briefing on Thursday.
As per the announcement, the prices for other quantities of the LPG will also go down in line with the new price at the same ratio. The price of autogas for motor vehicles was also cut down to Tk 57.24 from the present price of Tk 61.18 per litre.
Read: Appeal for LPG price hike: decision on Sunday
Announcing the new price, BERC Chairman Abdul Jalil said the price of retail LPG has witnessed the fall as the bulk LPG of Saudi contract price (CP) has declined globally.
“Saudi CP price has declined to $765.75 from the previous price of $850 per metric ton. Bangladesh’s private LPG operators buy the bulk LPG on the basis of the Saudi CP,” he told reporters at the virtual briefing.
The other members of the BERC were present on the occasion.
The BERC chairman said the price of the state-owned LP Gas Company’s LPG will remain unchanged as it has no relation with the global market price.
Read: Beximco LPG sings deal with Jamuna Oil to sell LPG at pumps
LPG industry insiders said the Saudi CP is normally announced at the end of every month to make it effective for the next month and it takes 7-10 days for a shipment of the fuel to arrive in the country.
Most Bangladeshi private companies import their bulk LPG from the Middle East on the basis of Saudi CP and market it locally.
Responding to a question the BERC chairman said the commission is the legitimate responsible body to fix the prices of all petroleum products including petroleum fuels as per the BERC Law.
“In line with the law the commission forwarded a proposal to formulate the necessary rules in this regard to the Energy Division. But still the file did not return to BERC”, he added.
The BERC for the first time fixed the retail-level LPG price on April 12 after holding a public hearing to comply with a High Court order.
Appeal for LPG price hike: decision on Sunday
The energy regulator will announce its decision on Sunday next on the appeal of the private operators of liquefied petroleum gas (LPG) to re-fix the current rates of the product at the retail level.
The Bangladesh Energy Regulatory Commission (BERC) will announce its decision at 12 noon on October 10, said a press release on Thursday.
On September 13 last, the BERC held a public hearing at BIAM auditorium responding to the appeal of the private LPG operators to raise the current price of the fuel.
Read: LPG Price: Operators demand an increase but consumers want reduction
Participating in the hearing, right groups strongly opposed the operators’ demand for raising the LPG price.
The rights groups urged the BERC to proceed on the issue cautiously to avert litigation in higher court, while the operators insisted on increasing the price further to cover losses in their business.
Both sides placed their respective arguments during the public hearing held at the BIAM Auditorium. Convened by the BERC, it was presided over by the commission chairman Abdul Jalil. Other members of the BERC also attended the hearing.
Read: LPG prices to go up again from Sept 1
The BERC has been fixing the LPG price on a monthly basis since April 12 this year. But LPG Operators of Association of Bangladesh (LOAB) opposes the process saying that much of their costs were not calculated and considered in price fixing that resulted in losses to their business.
Public hearing on LPG pricing postponed
Bangladesh Energy Regulatory Commission (BERC) has postponed its proposed public hearing on liquified petroleum gas (LPG) price fixing scheduled for July 7-8.
According to a BERC public notice, the hearing was suspended in compliance with the government’s directives against the backdrop of the countrywide strict lockdown that began on July 1.
The commission will announce a fresh date for the public hearing later, a BERC notice said.
The energy regulator had announced the scheduled public hearing responding to the appeal of the LPG operators, who oppose the present pricing formula for LPG.
Also read: Private operators demand fixing LPG price on “practical assessment” basis
The BERC held its last public hearing on LPG price fixing in January this year, and first fixed the price on April 12 after that, complying with a court order.
The LPG operators in private sector have been alleging that many of their cost components were not considered by the energy regulator while announcing the price.
As a result, their businesses have seen a huge financial loss, said Azam Chowdhury, president of LPG Operators Association of Bangladesh (LOAB), a representative body of the operators.
The operators, which include LPG cylinder manufacturers, bottling plant owners, importers, and traders, demanded addition of Tk 224 for a 12-kg LPG cylinder as costs of the operators while fixing the new retail price of LPG by the BERC.
Also read: Private companies’ 12 kg LPG price reduced to Tk 842 from June 1
The LPG businesses, having a size worth around Tk 300 billion, are at stake as the consequence, they said.
A 12kg LPG, being provided by private operators, is Tk 891 for July trading, as per the BERC’s latest order. The price was Tk 842 per for June trading, Tk 906 for May trading and Tk 975 for April trading, as fixed by the BERC.
However, most of the consumers in Dhaka were buying a 12kg LPG cylinder at a price ranging between Tk 1,000 and Tk 1,100 over the past three months, traders said.
Pvt companies’ 12-kg LPG to be costlier
The Bangladesh Energy Regulatory Commission (BERC) has refixed the price of Liquefied Petroleum Gas (LPG) of private companies at retail level with effect from July 1.
As per the new price, the private companies will have to sell 12-kg LPG at Tk 891 instead of the current price of Tk 842.
Read:Private operators demand fixing LPG price on “practical assessment” basis
The regulatory body refixed the price adjusting with Saudi Contract Price (CP).
The price of LP Gas Company Ltd, a state-owned company, will remain the same at Tk 591 for 12.5 kg LPG as it has no relation with Saudi CP.
In refixing the price, the value of per kg of LPG was considered to be Tk 70.24, including VAT, and such price will be applicable for refixing the price of other weighed containers.
The other quantity’s LPG will be selling at higher prices to be fixed rationally.
The auto gas price was also refixed at 44 per litre against the current price of Tk 41.47 under the price adjustment procedure.
Read:Private companies’ 12 kg LPG price reduced to Tk 842 from June 1
“This price will be applicable for the month of June until further adjustment in the Saudi CP,” said BERC Md Abdul Jalil while announcing the new price through a virtual briefing on Wednesday.
"The private companies' LPG price was refixed on the basis of Saudi CP," he told reporters.
Normally Saudi biggest oil company Armaco announces its CP for bulk LPG at the concluding state of every month for the next month’s transactions.
Most of Bangladeshi private companies import their bulk LPG from the Middle East on the basis of Saudi CP and market it in the country.
The BERC for the first time fixed the retail level LPG price on April 12 after holding a public hearing to comply with a High Court order.
About 20 private companies have been operating in the market with more than 95 per cent market share by annually importing 1.2 million metric tons of bulk LPG from mainly the Middle East while the state-owned LP Gas Company is locally producing 25,000 MTs of LPG from locally-produced condensates at different gas fields.
Read: LPG Growth in Bangladesh: Effective Alternative to Natural Gas
Responding to a question, the BERC chairman said they have requested some administrative ministries to take action against the retail sellers who do not abide by the regulator’s price.
He said the BERC is unable to take punitive action against the violators of law due to non-framing of required regulations by the Energy Division.