Bangladesh Energy Regulatory Commission (BERC) on Tuesday started its public hearings on the proposal of raising electricity tariffs at both bulk and retail levels.
On Wednesday, the regulator will hold public hearing on the proposal to increase retail tariffs.
On the first day of the hearing, the state-owned Power Development Board (PDB) formally placed its proposal for raising tariffs on average by 18.12 percent.
As per the PDB proposal, the tariff will go up by Tk 0.84 to Tk 5.51 per unit from the existing tariff of Tk 4.67 per kilowatt hour (per unit) bulk level.
Listening to the submissions from both PDB and groups opposed to the hike, BERC chairman AR Khan admitted that definitely there is corruption afflicting the government body.
The technical evaluation committee of the BERC did not find the PDB proposal fully justified, and following its own analysis, came out with its own proposal to raise the tariff to Tk 4.89 per unit at bulk level.
Despite the proposal, the final decision on raising the tariff will be taken by the full body of the commission headed by BERC chairman.
Taking part in the hearing, a good number of representatives from different consumer rights groups, social, political and business groups vigorously opposed the PDB proposal and demanded answers to how the power tariff can be increased, in view of the fall in energy prices on the international market.
While presenting the proposal, chief engineer (planning) of the PDB Mizanur Rahman said they need to raise the bulk electricity tariff as they have to purchase power from the private sector at higher rate.
PDB said that if it is not allowed to raise bulk tariff, it has to incur a loss of Tk 2,200 crore even after receiving budgetary support (subsidy) of Tk 4000 crore from the government.
PDB officials also said that despite decline of fuel price on the international market, they have to purchase fuel from the state-owned Bangladesh Petroleum Corporation (BPC) at the same price.
“Despite the fall in fuel price, we have to buy furnace oil at Tk 60 and diesel at Tk 68 per litre from the BPC. That’s why the PDB’s production cost did not decrease,” said Mizanur Rahman.
Opposing the PDB proposal, advisor to the Consumers Association of Bangladesh (CAB) Professor M Shamsul Alam raised 14 points refuting the government proposal.
He said when globally fuel price is declining, there is no justification to raise power tariff both at bulk and retail tariff. “Globally furnace oil price is Tk 22 and diesel Tk 26 per litre, but PDB is buying Tk 60 and 68 per litre. Why this is happening we don’t know,” he observed.
He also said that due to huge corruption in the PDB, the power production cost is going up abnormally.
He also alleged that PDB has been buying electricity without following “order of merit” due to pressure from higher level vested interest groups, which resulted in the increase in production cost.
“In many cases PDB buys power from costlier plants at over Tk 5.15, keeping idle its own plants from which electricity costs below Tk 0.67 per unit.”
A representative of BGMEA said if power tariff is raised further, they will lose their competitiveness in the global market.
CPB leader and Dhaka University Professor MM Akas said it is totally unacceptable to raise electricity tariffs when the fuel price is coming down globally.
The hearings will continue until January 25.
BERC starts public hearing on power tariff hike proposal