Anisul Islam Noor :
Power Development Board has sent a proposal to Bangladesh Energy Regulatory Commission (BERC) to increase electricity tariff despite power production cost falls by Tk0.47 per unit this year.
Production of per unit (1 kilowatt) electricity cost was Tk 6.27 last year, which had come down to Tk 5.80 per unit this year. The expense will fall further if the price of furnace oil used in the power plants is adjusted with the international markets, sources said.
The PDB along with other distribution companies submitted a proposal to the BERC to raise power tariff despite earning profit.
PDB proposed to increase power tariff up to 29.39 per cent for the distribution companies at the wholesale level. The price of power was raised six times in last five years. On September 1 last year, the government increased the cost of electricity.
M Tamim, Special Assistant to the Chief Adviser of the former caretaker government and also Professor of Petroleum Engineering Department of Bangladesh University of Engineering and Technology (BUET) said there is no logic in not adjusting the petroleum price used for power production. Everyone in the country will be benefited if government increases the power tariff after adjusting the petroleum price used for power production, he said.
He said, price of any international product used by the common people is not reduced in accordance with the international market. But the price is raised in no time, once it increases in the international market. This applies to every item whether it is wheat, edible oil or petroleum.
The production cost of per litre octane in the country presently is less than Tk 50. Government is selling it for Tk 99 only. The difference between production cost and the selling price of petrol is almost the same. The government is selling per litre diesel for Tk 68. The diesel import, however, costs Tk 40 per litre. Government is selling per litre furnace oil at Tk 62, which is used in the power plants. The buying price is around Tk 25.
A World Bank research report published in last October said that from May 2014 till May 2015 the price of soybean oil dropped by 19 per cent in the World market. In Bangladesh, it dropped only by nine per cent. If the price is dropped by Tk 10 in the World market, it is dropped by Tk 1.10 in Bangladesh.
In the proposal, for a electricity tariff hike, Dhaka Electric Supply Company (DESCO) proposed 8.35 per cent; Dhaka Power Distribution Company (DPDC) 8.86 per cent; West Zone Power Distribution Company (WZPDC) 10.76 percent; and Rural Electrification Board (REB) proposed 7.08 percent price hike.
BERC member Selim Mahmud told The New Nation that the commission officials were now working on the proposals.
PDB officials said, production cost of power has come down as owners of some quick rental power plants are now using imported fuel. They are buying oil as per international standard. So, they can produce power at Tk 6 per unit.
Some officials of Power Development Board and Power Ministry said price of energy and fuel for power generation must be fixed based on international rate; therefore, the profit and loss could not be burden for the government.
State Minister for Power, Energy & Mineral Resources Nasrul Hamid said that PDB had faced losses of Tk 3,000 crore since there was no coordination in setting the price of fuel for power generation. The government has to subsidise the loss at the end. But it depends on government’s policy decision to fix energy price.
PDB sources said, the government subsidy in power sector has increased by Tk 7,000 crore by a year. The subsidy might be reduced as the government would buy 1,000 megawatts power in comparatively lower price.
Energy expert M Tamim said, power generation costs and retailing price can be almost same if the government adjusts the energy price.
