Bangladesh Energy Regulatory Commission (BERC) will hold public hearings from today on proposed hike in gas tariff amid widespread criticism from consumer right groups, political parties and experts, with some questioning the legality of the move when most of the state-owned gas companies are making hefty profits.
The hearings will continue for four days when the commission will hear the views of different stakeholders alongside the proposals submitted by the gas companies.
Recently, the state-owned gas transmission, distribution and marketing companies submitted their proposals to BERC seeking hike in gas tariff ranging up to 66 per cent for all types of consumers.
The public hearing on the proposals of the gas companies will be held at the TCB auditorium at Karwan Bazar in Dhaka between March 11 and March 14.
Protesting the move, Energy Adviser to the Consumers’ Association of Bangladesh (CAB) Professor Dr Shamsul Alam said, “As per the law, BERC can not raise gas tariff if the gas transmission and distribution companies are in profit.”
Gas Transmission Company Limited (GTCL) is the lone state-owned gas transmission company of Bangladesh, while Titas Gas Transmission and Distribution Company Ltd, Bakhrabad Gas Distribution Company Ltd., Jalalabad Gas Transmission & Distribution System Ltd., Karnaphuli Gas Distribution Company Ltd., Pashchimanchal Gas Company Ltd. and Sundarban Gas Company Ltd are other gas distribution companies.
All the distribution companies except Sundarban Gas Company Ltd are making profit. Even the GTCL is also a profit making organization.
“In this situation, the process of raising gas tariff afresh is a ‘blatant violation’ of the law,” said Professor Dr Shamsul Alam.
Citing the existing law, he also said that being the country’s energy regulator, the BERC in October last year increased the gas tariff. Once the price is increased, gas distribution and transmission companies cannot place fresh proposals for tariff hike within 12 months. If they do so, the BERC is supposed to revoke their proposals without going for any hearing. “So, it is clear that BERC is going to hold the hearing violating the law. We are condemning the move,” said Prof Dr Shamsul Alam, hinting that CAB may seek legal remedy against the move.
Different political parties, including, BNP, CPB and Citizen’s right groups also protested the move terming it anti-people and unlawful.
Proposals submitted by the gas companies to the BERC show, Titas Gas Transmission and Distribution Company will make a profit of Tk550 crore in the current fiscal year even if the price of gas is not raised.
Titas in its proposal to the BERC said that if the gas tariff is not raised, the profit of the organization would be reduced and it may not provide dividends to the shareholders.
Titas Gas Transmission and Distribution Company Ltd was listed on Dhaka Stock Exchange in 2008 and the company provided 25 per cent cash dividend to its shareholders for the year 2018, according to Dhaka Stock Exchange.
Besides, annual profit of Jalalabad Gas Transmission & Distribution System Ltd. will stand at Tk 100 crore this year, Pashchimanchal Gas Company Ltd. Tk 51 crore, Karnaphuli Gas Distribution Company Ltd. Tk 247 crore and GTCL Tk 16 crore.
Bakhrabad Gas Distribution Company did not mention the full details of the profits and losses in its proposal to the BERC, while Sundarban Gas Company Ltd was making loses due to setting up Kushtia-Dhaka gas pipeline with Tk 530 crore loan.
Commenting on the BERC’s move, energy expert and a Professor of Geology Department at the University of Dhaka Badrul Imam said, “It is nothing but an eye-wash. In the last public hearing, we also proved that gas distribution companies are in profit. But the BERC finally raised the gas tariff bypassing the fact. The BERC, in fact, first decides to increase the gas price and then go for public hearing.”
BERC Chairman BERC chairman Monowar Islam could not be reached for comments in this regard.
Once the new tariff goes into effect, the price for domestic consumption will be increased by an eye-watering 50 per cent (for double burner gas stove), whereas the industrial consumers will also have to pay 99 per cent per cent more for the utility.
