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Gas Price Hike

No Other Alternative To Meet The Revenue Gap?

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11th-Jul-2019       
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Muhammad Quamrul Islam :
In Bangladesh, new gas price hike by 32.80 percent as per announcement of the government came into effect from July 1 on the very first day of new national budget for fiscal year 2019-20 evoked criticisms as usual by NGO civil societies, political parties that led to half day hartal by left alliance powered by moral support of one of the two main parties BNP on July 7, 2019. And got coverage of media over the week, for whose benefit time will say, as elderly persons hardly find determination in them needed for ensuring welfare for common people. Once again lack of ideological battle in the politics of Bangladesh surfaced in TV channel in the evening of July 7 which showed a veteran turncoat retired bureaucrat-cum-politician, a unique phenomenon in Bangladesh, has become a member of ruling Awami League advisory committee who is  a known as a BNP leader leaning to left.
 As such there is no political pressure on the government to take cognizance of their criticisms, which will act according to its sweet will.  Any way such politics will ignite not alleviate the sufferings of the common  people which has regional implications, as well as Bangladeshi wage earners sending huge  remittances from abroad to this small  country since 1980s for development of all not power elite only and those settled in developed West, who cannot remain unconcerned.
That the incidence of power hike in each case will finally fall on the common people goes without saying.  Households will have to pay Tk 175 more for gas from this month. The new rates raised gas tariff for power plants 40.82 percent, for fertilizer factories 64.21 percent, for CNG users  7.5 percent, for captive power plants 43.97 percent, for industries  37.89  percent, for tea estates 44.20 percent, for commercial users 34.98  percent, and for households using burners on meters 38.46 percent.  The weighted average gas tariff for all users including households, industries and businesses will rise by 32.80 percent. It would accentuate sufferings of educated unemployed, a growing aspect of Bangladesh economic growth caused by dysfunctional Universities and distressed families countrywide which go unnoticed.
True, people in the power circle and government bureaucrats including public universities are enjoying lavish salaries and benefits. Big businesses have no dearth of money, earning enormously in formal and informal ways.  Most politicians, ministers, MPs and party leaders live on state support but the vast majority of people comprising the poor and middle income groups see only difficult days ahead. The cost of living is galloping on daily basis, but income of families is not rising rather diminishes to meet day to day necessities of life on various counts arising from lawlessness etc. In recent time children's education expense, cost of medical treatment and transportation etc. has gone up. Thankfully national media carry such reports but to no effect in power hierarchy, what waits is anybody's guess. International community and neighboring countries cannot keep their eyes shut to this dismal situation for immediate gains as it would affect them adversely anytime also.
The government contention for gas price hike is to help it bear the expenses of importing liquefied natural gas (LNG) raises the question is there no other alternative to meet the revenue gap, say by preventing revenue leakages by system loss in gas sector which is theft and pilferage not technical, and increasing cost efficiency of companies which reduce corruptions and raise the level we had till first half of 1980s. If not, can't the fund be re-appropriated from other revenue heads of budget, by austerity measures, to meet the stated burden or straight forward impost cut on avoidable  revenue expenses, which can only be considered  by Finance Minister AHM Kamal.
 We are emboldened to say so as I am told by my neighbour who is contemporary of Kamal in College that he is an Old Victorian (ex-student of Comilla Victoria College) in mid 1960s and an EPSU leader and as such aware Comilla was known as Gas City when Bakhrabad Gas System Ltd (a government owned company) during 1980-85 implemented its big development projects under gas production, transmission and distribution successfully with foreign assistances from its Head Office Comilla by a dedicated core of officials. The Head of Finance shouldered the onerous responsibility braving conflicting interests usual in a Gas Company, personally set example of sacrifice toeing the line of his teacher Principal Akhter Hamid Khan founder of Comilla Rural Development Academy. It was expected Gas City in due course will carry the country forward in integrated gas development, transmission and distribution as a role model thru continuous update economically and technically to share with international experiences.
Bangladesh Energy Regulatory Commission (BERC) said justifying the hike government is spending about Tk 35 for per cubic meter of imported LNG, while the cost of locally produced gas is only about Tk 5. It started importing LNG from August last year caused by the depletion of domestic reserves, no new discoveries and rising demand. Why no new discoveries have not been elucidated though this country has enough bright experiences of the past at Titas, Bakhrabad, Jalabad and so on institutionally and expertise who also talked about off shore drilling in Bay of Bengal in coordination with maritime border with India and Myanmar. Further, it is not correct to say international price of LNG has increased, rather it has been decreased. As such we request the government thru BERC to clarify the position on both the counts.
It is really encouraging to note our bordering West Bengal, India has reduced LNG price by Tk 150 per cylinder to give the benefit of lower import cost. It was due to strong opposition spearheaded by West Bengal Chief Minister Mamata Banerjee who questioned the price increase from June 1 after Lok Sabha elections. This is politics; leaders of Bangladesh should take into consideration along with enjoying sovereign facilities.
(Muhammad Quamrul Islam an Economist, Advocate and Columnist)

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