Petrobangla, the state-run Oil, Gas and Mineral Resources Corporation, has drafted a proposal to raise the prices of natural gas by up to 105 per cent to adjust high import costs of Liquefied Natural Gas scheduled to begin in 2018.
On its proposal Petrobangla considered a hike by 92 per cent for industrial boilers, up from Tk 7.76 per cubic metre or unit to Tk 14.90, and that for captive power plants in industries by 55.72 per cent, up from Tk 9.62 per unit to Tk 14.92, said officials.
‘We will finalise the proposal after examining the potential impacts of gas price hike on the country’s economy,’ state minister for power, energy and mineral resources Nasrul Hamid told New Age on Tuesday.
He said they would hold discussions with all the major consumers of natural gas before finalising the price hike proposal.
The gas distribution companies, subsidiaries of Petrobangla, would submit the proposal for raising gas prices to the Bangladesh Energy Regulatory Commission after the government begins LNG import from April 2018, said officials.
Petrobangla took the move to raise gas prices seven months after the energy commission raised the gas prices by 22.7 per cent
on an average with effect in two phases, one from March 1 and the other from June 1.
The minister also said that the government would have to raise gas prices after four to five years when at least 2,500 million cubic feet of natural gas would be supplied from imported LNG as the supplies from indigenous gas fields would drop below 2,000 mmcfd from current supplies of 2,750 mmcfd.
The current level of gas supplies from indigenous gas fields will start declining from 2018, he said, adding that there was not much hope in oil gas explorations in land or waters.
The government plans to increase gas supplies by 500 million cubic feet per day from April 2018 and another 500 mcfpd from October in the same year with imported LNG as the US company Excelerate Energy and local energy conglomerate Summit LNG Terminal Company will set up two floating terminals and LNG re-gasification units near Moheshkhali Island respectively.
Bangladesh Textile Mills Association vice-president Mohammad Ali Khokon said that the recent hike in gas prices had already affected the linkage industries in apparel sector which would face further challenges if the government passed on the import cost of LNG to industries.
‘The major export in apparel sector depends on its linkage industries which have been expanded based on cheap workers and supply of natural gas,’ he said.
Further rise in gas prices would force many entrepreneurs to shut down their factories as the country did not produce raw materials or have the technologies in the sector that could help value addition in apparel sector, Khokon added.
Bangladesh Knitwear Manufacturers and Exporters Association president AKM Salim Osman said that the industry needed uninterrupted gas supplies to ensure 100 per cent use of the factories’ capacity.
‘We have already experienced gas price hikes on several occasions but the utilities have not increased the level of gas supplies in line with our demand,’ he said, adding that the knit industries could hardly utilise 60 per cent of industries’ installed capacities.
Asked about the possible hike in gas prices, he said that they would examine whether the knit industry could afford the supplies of natural gas.
Among the other categories, Petrobangla proposed to raise gas prices for domestic burners by 23 per cent, up from Tk 9.10 per cubic metre or unit to Tk 11.20, for CNG driven vehicles by 50 per cent, up from Tk 40 per unit to Tk 60, for fertiliser factories by 75.28 per cent, up from Tk 2.71 per unit to Tk 4.75, for power grid tied power stations by 57.91 per cent, up from Tk 3.16 per unit to Tk 4.99, for commercial uses by 105.4 per cent, up from Tk 17.04 per unit to Tk 35, and for tea estates by 63 per cent, up from Tk 7.42 per unit to Tk 12.10.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Country