The Bangladesh Energy Regulatory Commission (BERC) has requested proposals from gas distribution companies regarding a potential increase in industrial gas prices. Letters were sent to the distribution companies yesterday, according to sources at BERC.
Once the proposals are received, BERC’s technical committee will review them. If the proposals are deemed justified, the committee will recommend holding a public hearing on the matter.
Speaking on the issue, BERC Chairman Jalal Ahmed stated that the decision was made during a meeting held on Tuesday. The proposals will be evaluated for feasibility, and if found reasonable, they could lead to further deliberations and potential price adjustments.
Petrobangla’s Proposal: Significant Price Hike Suggested
On Monday, Petrobangla proposed a significant increase in gas prices for new industries and captive power plants, suggesting a rate of Tk 75.72 per cubic meter—more than double the current rate of Tk 30 per cubic meter for existing industrial users.
The proposal was justified by the rising cost of imported liquefied natural gas (LNG) and supply-demand imbalances. Petrobangla reported that the daily gas supply stands at approximately 2,800 million cubic feet, far short of the 3,800–4,000 million cubic feet demand, resulting in a deficit of about 1,200 million cubic feet.
Currently, domestic gas fields provide 75% of the total supply, while LNG imports meet the remaining 25%. However, domestic production is expected to decline further, increasing reliance on expensive LNG imports. By the 2030–31 fiscal year, LNG imports could constitute 75% of the gas supply.
Petrobangla also noted that the current LNG import price of Tk 65.70 per cubic meter creates a significant gap with domestically produced gas, which they argue must be narrowed to sustain the energy sector.
The Ministry of Power, Energy and Mineral Resources stated that the government has proposed revising gas tariffs for industrial and captive customers to encourage efficient usage and curb resource wastage. Under the proposed structure, lower rates would apply to increased load usage or new connections, but excess consumption would incur the full cost of LNG imports. The implementation is planned for July 2025, with gas distribution companies tasked with providing necessary consumption data.
Expert Concerns: Fairness and Practicality Questioned
Energy experts and economists have sharply criticized the proposal, calling it impractical and detrimental to the industrial sector.
Dr. M. Shamsul Alam, Energy Advisor to the Consumers Association of Bangladesh (CAB), described the proposal as “unfair and unjust.” He argued that instead of burdening industries with higher costs, the focus should be on addressing inefficiencies, reducing waste, and curbing theft and corruption in the energy sector.
“Frequent price hikes fail to address the root causes of the energy crisis and deter investments,” Dr. Alam emphasized. He also urged interim governments to avoid making such decisions, advocating instead for transparency and efficiency in the energy sector.
Dr. Ijaz Hossain, a former professor at the Bangladesh University of Engineering and Technology (BUET) and an expert in energy and sustainable development, expressed similar concerns. He warned that the proposed hike could discourage industrial investments and create inequities among gas users.
“If prices must increase, it should apply uniformly across all users,” Dr. Hossain stated. He criticized the proposal for lacking coherence and foresight, adding, “This reflects a significant disconnect from reality and will only worsen the ongoing crisis.”
Both experts stressed the importance of strategic long-term planning and recommended leaving critical decisions to elected governments.
Implications for the Industry
If implemented, the proposed hike could significantly impact the industrial sector by deterring new investments, reducing the competitiveness of existing industries, and exacerbating inequalities within the energy market.
Experts have urged the government to reconsider the proposal, emphasizing the need for sustainable solutions that address the energy crisis without jeopardizing industrial growth.
