Power tariff hiked again
01 February 2023
Staff Reporter :
Within a gap of two weeks, the government again hiked the electricity price on Tuesday without caring the financially crippled population who are already overburdened by the exorbitant price hike of other necessities of life.
Bypassing the public hearing of the Bangladesh Energy Regulatory Commission (BERC), the government made the executive decision effective from February 1 following the passage of the Bangladesh Energy Regulatory Commission (Amendment) Bill 2023 was passed in parliament on Sunday.
The industrialists, the business community and the opposition political parties have expressed their grave concern over the hike of electricity price as it would badly affect the entire economy which is already gasping due to acute dollar crisis for unhealthy foreign reserve.
The electricity price hike, they said, would deepen crises when the industrial units have already been facing spiraling prices of raw materials and other inputs.
However, the price hike coincides with the $4.7 billion loan approval by the International Monetary Fund (IMF) on Monday sought by the Bangladesh government.
Apart from the price hike of gas, electricity and fuel, the fertilizer price has also gone up while cost of 51 services of Bangladesh Road Transport Authority (BRTA), products sold at subsidized prices of Trading Corporation of Bangladesh (TCB) and rice for food friendly programmes have gone up. Even Dhaka WASA has increased the water price 14 times in the last 14 years too.
The average retail electricity price has been hiked by 5 per cent and the bulk electricity price by 8 per cent, read the Monday's midnight order, saying that the retail tariff was raised at different levels of consumers.
The tariff was raised for lower level consumers by an average 5 per cent to Tk 4.14 per unit (each kilowatt hour) from Tk 3.94 per unit, while bulk tariff was raised by 8.06 percent to Tk 6.70 from Tk 6.20 per unit.
The retail electricity price has been readjusted under the authority vested in Section 34 (ka) of the Bangladesh Energy regulatory Act, 2003, which has enabled the government, after its
amendment, to change electricity price by an executive order, showing a thumb to the BERC. The government used this power for the third time. After assuming power in 2009, the government has increased the price for 12 times.
Meanwhile, energy experts believe the tariff enhancement decision came in compliance with the conditions of the IMF that approved $4.7 billion in loan for Bangladesh.
Earlier, Nasrul Hamid, State Minister for Power, Energy and Mineral Resources, said, "The electricity price will be adjusted every month following the drastically increased fuel in the international market."
In February, prices have been increased by eight per cent at the wholesale level and five percent at the retail level.
Distribution companies had applied for at least a 15.43 per cent increase in retail/consumer-level electricity prices to cover their financial loss against the 20 per cent price increase at the wholesale level.
During a hike in January, Professor M Shamsul Alam, energy adviser to the Consumers' Association of Bangladesh (CAB) said, "Amid this unprecedented inflation and the wage gap, required revenue of the distribution companies could be managed without hurting the consumers at micro and macro level of economy."
Following the two price hikes, the consumer will have to pay an additional Tk5,800 crore to the power companies if this rate continues for a year.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruqe Hassan requested the government to defer the new electricity price as energy prices had been increased recently
"This utility price hike will create more inflationary pressure, which will increase bank interest rates- all are in a chain," he said.
"Due to the additional cost, we will lose our competitiveness at global markets as the exporters have been facing the effect of the Russia-Ukraine war-driven slowdown in orders," Faruqe Hassan further said.
BGMEA Vice President Shahidullah Azim said the government should not increase gas and electricity prices suddenly.
"Such move will put a burden on public life. Utility prices hike will increase about 40 per cent of our production cost," he observed.
According to Sheikh H M Mustafiz, a businessman said, "Rising electricity prices at the consumer level will certainly put another strain on our production costs. On the other hand, living cost of our workforce will further increase while commodity price inflation is already putting a huge strain on our daily lives. I don't know who will compensate the extra bill, because our FOB price is shrinking a lot."
