BERC not playing its mandated role

Published: 00:05, Jun 13,2018

 
 

AS citizens of Bangladesh face a high living cost, the government is taking a step to increase gas price. The Gas Transmission Company Limited and Petrobangla asked for an increase in gas transmission tariff, expressing fear that its profits would dip further unless the transmission tariff was increased commensurate with its investments in laying pipe lines for the supply of LNG distribution. It proposed an increase in the transmission tariff from Tk 0.26 to Tk 0.44 a cubic metre of gas. The transmission tariff was last increased in March 2017, when the tariff was increased to Tk 0.26 from Tk 0.15 per cubic metre of gas. The proposed increase will eventually increase the gas price for industrial as well as household consumers. Without properly assessing the merit of the demand and its impact on consumers of such frequent increases in gas price, the Bangladesh Energy Regulatory Commission called a public hearing at its office for expert and public consultation. When it was expected that the BERC will meticulously assess the logic behind the proposed increase, it is treating the public hearing just as another bureaucratic step towards increasing the tariff. Executives of the Bangladesh Consumers Association have, therefore, rightly termed the public hearing a farce.
A BERC technical evaluation committee after reviewing the GTCL’s proposal said that in 2019 financial year, the utility agency would incur a deficit of Tk 0.10 per cubic metre of gas from its transmission cost at the current rate. The statement indicates that the assessment was more focused on GTCL profit maximisation. Consumer rights advocates and energy experts attending the meeting blamed the government for compromising public interest to secure business interest. They have also blamed the government for relying on costly imported LNG and questioned the logic of making the nation dependent on an expensive alternative. Earlier in 2017, the Dhaka Chamber of Commerce and Industry made similar observation and said the costly LNG cannot be a long-term solution to energy crisis. Instead, it is hindering industrialisation by increasing the production cost. In this context, the BERC, instead of playing its mandated role that is to provide energy at just and reasonable cost and protection of consumer interest, has taken steps to the contrary. There are other instances in which the commission is found incapable of performing its mandated duties. What has become obvious is that the regulatory body is sorely lacking in technical capacity for analysing the tariff rate. Despite its legal entitlement and autonomy, it seems to be mechanically following the advice of various government agencies and shifting the increased cost of gas transmission onto consumers.
The government, under the circumstances, must ensure that the commission operates without undue influence of vested interests involved in the energy sector and prevent frequent increase in gas transmission tariff. For a long-term solution, the government must step up its exploration to discover new gas reserves in Bangladesh.

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