Bangladesh Energy Regulatory Commission, despite having legal entitlement, appears reluctant to rationalise fuel oil prices while it has been raising prices of electricity and natural gas time and again.
After increasing the power prices by 5.30 per cent on an average, its chairman Monowar Islam has told New Age that the commission is not yet capable of doing all its regulatory duties related to fuel oil market.
‘It is a new organisation and will need more time to be able to fix fuel oil prices and regulate the market,’ he pleaded.
The commission has so far raised retail power prices by approximately 82 per cent at consumers’ end since March 2010 mainly citing increased prices of fuel oils and growing dependence on fuel oil-fired power plants.
The energy commission once lowered the prices of diesel and kerosene by Tk 2 per litre on January 12, 2009 after the prices fell on international market.
Later, the government, using its executive power, unilaterally raised fuel oil prices by seven times between January 24, 2011 and January 4, 2013 saying that the prices on international market had gone up.
The government, however, lowered the prices on a very small scale even after the prices were very low on international market, which helped the government earn approximately Tk 21,000 crore in profit, said experts.
The energy commission played an anti-people role in fixing energy prices while it was created to rationalise the prices of primary fuels as well as electricity to offer them at a competitive prices, they alleged.
Section 59 of Bangladesh Energy Regulatory Commission Act- 2003 empowers the commission to fix prices of electricity at generation, transmission and distribution ends and those of fuel oils, natural gas and coal.
While estimating power generation cost, the commission considered diesel and furnace oil prices fixed by the government at much higher rates than its import costs although the commission was entitled to fix fuel oil prices, Consumers Association of Bangladesh energy adviser M Shamsul Alam said.
At least, Tk 0.50 per unit could be saved at generation end if the fuel oil prices were rationalised by saving Tk 2,672 crore in a year taking 2015-16 as test year, he suggested.
Shamsul Alam, who led a move to place a proposal to the energy commission to reduce the prices of electricity, also said that the energy commission had no other choices but to follow the path the government showed.
Energy expert M Tamim, also a petroleum engineering professor at Bangladesh University of Engineering and Technology, said that the energy commission was not at all an independent body although there was a law and other legal instruments in its favour.
‘This has been causing controversies over fixing the energy prices,’ he said.
Since June 2014, the price of Brent Crude started declining from $117 per barrel and dropped to $27.65 per barrel in January 2016 and never peaked as high as $70 until now.
The last week’s fuel market was closed with Brent Crude price at $63.86 per barrel.
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