Petrobangla, 7 other distributors again want gas prices hiked

Despite being rejected, seven state-run distribtion companies have yet again proposed that the prices of gas used by household consumers raised by a staggering 117 per cent.

This is the second time in a week that the gas companies made the proposal to the energy regulatory body, according to UNB.  

Alongside the gas distributors, their principal gas supplier Petrobangla, too, on Tuesday placed its proposal to raise the price of the natural gas at bulk leve.

Earlier on January 21, Bangladesh Energy Regulatory Commission (BERC) rejected a similar proposal from the six state-owned distributors and one transmission company on grounds of technical errors.

But it was not immediately known how much the Petrobangla proposed to raise the gas price at the bulk level.

If the BERC accepts the distributors’ proposals the monthly gas price for a double burner will increase to Tk 2100 from existing Tk 975, while price for single burner will rise to Tk 2000 from current Tk 925.

“We’ve received proposals from all the eight entities including Petrobangla by Tuesday”, Abdul Jalil, chairman of BERC told UNB.

He, however, informed that the Petrobangla’s proposal still lacks some of the wanted documents which it will place in a day or two.

Of the 8 entities, Petrobangla is the bulk supplier to the six downstream distribution companies.  They are Titas Gas Transmission and Distribution Company Ltd (Titas Gas), Bakhrabad Gas Distribution Company Limited (BGDCL), Jalalabad Gas Transmission and Distribution System Ltd (JGTDSL), Paschimanchal Gas company Limited(PGCL), Karnaphuli Gas Distribution Company Limited (KGDCL) and Sundarban Gas Company Limited (SGCL) while the only transmission company is Gas Transmission Company Limited (GTCL). About the latest move by the gas companies, the BERC chairman said that after receiving the remaining documents from the Petrobangla the commission will sit in a meeting to scrutinize their documents and judge the primary merits of the proposals.

“If all required documents are found to be valid and acceptable, then the commission will form a technical committee to scrutinize in detail the proposals and finally their proposals, including the findings of the technical committee, will be placed for a public hearing”, he said.

Official sources said the Petrobangla and its 7 subsidiary bodies submitted the proposals to raise gas price at the bulk and retail levels following the directive of the Energy and Mineral Resources Division of the ministry of power, energy and mineral resources.

For last several months, the Energy Division has been under pressure from the finance ministry to collect more revenues by raising gas price to offset subsidies in the energy sector.

A member of the BERC said the Petrobangla currently imports only 5 per cent of its daily consumption from highly volatile international spot market where it has to buy gas at higher price.

It imports its 20 per cent gas from two international companies under long-term contracts where price is static.

“If the local production is raised by 5 per cent, then the country will not need to import the 5 per cent gas from volatile market at higher price and finally it would not have to raise the gas price at retail level”, he added.

Normally, the Petrobangla supplies 2,700-3,000, million cubic feet (mmcfd) gas per day of which 2,300 mmcfd is produced locally while 600 mmcfd is imported as liquefied natural gas LNG.

Of this imported 600 mmcfd, 150 mmcfd is imported from spot market at a variable price between $10 and $30 per unit.