Costly imported LNG is not the solution

Published: 00:00, Mar 14,2019


TITAS Gas Transmission and Distribution Company at a Bangladesh Energy Regulatory Commission public hearing on Tuesday proposed 80 per cent price increase for household users, taking it Tk 1,440 from Tk 800 for double burners and to Tk 1,350 from Tk 750 for single burners a month. For electricity and fertiliser production, it proposed a gas price increase by 208 per cent for power generation, 211 per cent for fertiliser production and 132 per cent for industries. It sought an increase in gas transmission tariff amidst fears that its profits would further decline unless the tariff was increased commensurate with its investments for laying out pipelines for supply to LNG distribution. Energy experts, consumer rights activists, left political leaders and the business community, however, termed the increase unjustifiable.
Expert and public opposition to the proposed gas price is based on at least two concrete grounds. Keeping to the laws of the Bangladesh Energy Regulatory Commission, gas price cannot be increased twice in a financial year. The commission increased the bulk, distribution and transmission rates of LNG-blended gas in October 2018. Therefore, the current proposal of the gas distribution companies is a direct violation of the regulation. The transmission and distribution companies seek the increase on the basis of Bangladesh importing 1,000 million cubic feet of gas per day in the form of liquefied natural gas, but Bangladesh now imports 500mmcfd. In effect, consumers are expected to pay a higher price for a service that is not available to them now. Meanwhile, gas supply for household consumption remains unsatisfactory. In February, gas outage took place in a vast area of the capital city, causing severe inconvenience to household consumers. Businesses, too, have joined in the growing call for the government to drop the plan as the Federation of Chambers of Commerce and Industries think that the fresh increase in gas prices would make entrepreneurs bankrupt and harm employment generation as the cost of business increased by 29 per cent in past few years. Previously, the government refused to heed public opposition and slapped an increase gravely impacting people’s lives and the industrial sector. It is time that the commission meticulously assessed the logic for the proposed increase, instead of treating the public hearing as just another bureaucratic step towards increasing the tariff.
Consumer rights advocates and energy experts have asked the government to revisit its energy policy that is mostly dependent on costly imported LNG and questioned the logic of making the nation dependent on expensive alternatives. In 2017, the Dhaka Chamber of Commerce and Industry made a similar observation and said that the costly LNG could not be a long-term solution to energy crisis. The government must, therefore, not hastily increase prices of gas, compromising public interest, and realise that imported LNG is not the solution but the problem. For a long-term solution, it must step up its exploration to discover gas reserves.

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