Dhaka March 22 2022: At the beginning of the 1st day’s of four days long hearing, Petrobangla presented its proposal claiming to increase the bulk mix gas price from Tk12.30 per cubic metre of (July-December) to Tk15.30 per cubic metre and retail gas price from Tk9.80 per cubic metre to Tk20.3591.
At present, 2% system loss is allowed in the gas distribution system. But the real system loss is more than 8%, which is more than the LNG that the country imports from the spot market, said a Bangladesh Energy Regulatory Commission (BERC) source.
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The purchase price of per cubic metre of gas at Petrobangla end would be Tk15.30 which was Tk12.50 in July-December of 2021-22 fiscal year, if 850 mmcf gas is imported daily.
However, the technical evaluation committee of BERC found out that Petrobangla’s required revenue would be Tk12.47 per cubic metre in 2021-22 fiscal year, which is Tk0.03 less than they demanded.
In addition, Petrobangla has earned around Tk2,538crore since August 2018 to June 2021 after bearing LNG import cost.
Therefore, the technical committee asked Petrobangla to back Tk9,227 crore that it took from the Energy Security Fund in the 2017-18 to 2019-20 fiscal year.
GTCL recommended margin hike
In the second half of the day, the 2nd hearing of the day was held on the Gas Transmission Company Limited (GTCL) proposal where it demanded a gas wheeling charge hike by 72%.
At present, the lone gas transmission company gets Tk0.4235 for wheeling per cubic metre of gas. But it demanded to increase it to Tk0.7318 for 2021-2022 fiscal year.
After detailed analysis, BERC’s technical committee recommended increasing the wheeling charge by Tk0.06 to Tk0.4890 cubic metre.
As per the schedule, public hearing will be held on the proposals made by Sundarban Gas Company and Pashchimanchal Gas Company will be heard on Tuesday.
As per the gas distributors’ proposals submitted back in January, the monthly gas price for a double burner will increase to Tk2,100 from the existing Tk975, while the price for a single burner will rise to Tk2,000 from the current Tk925.
For the last several months, the Energy Division has been under pressure from the finance ministry to collect more revenues by raising gas prices to offset subsidies in the energy sector.
A member of the BERC said Petrobangla currently imports only 5% of its daily consumption from a highly volatile international spot market where it has to buy gas at higher prices.
It imports its 20% gas from two international companies under long-term contracts where prices are static.
“If the local production is raised by 5%, then the country will not need to import the 5% gas from volatile markets at a higher price and finally it would not have to raise the gas price at the retail level,” he added.
Normally, the Petrobangla supplies 2,700-3,000 million cubic feet (mmcfd) gas per day of which 2,300mmcfd is produced locally while 600mmcfd is imported as LNG.
Of this imported 600mmcfd, 150mmcfd is imported from the spot market at a variable price between $10 and $30 per unit.
