The Bangladesh Energy Regulatory Commission (BERC) is set to hold a public hearing on February 26 regarding a proposal from Petrobangla to increase gas prices for new industrial consumers.
Under this proposal, newly connected industrial consumers will be required to pay higher rates than existing ones, creating a pricing disparity within the same category.
Energy sector experts warn that such a discriminatory pricing model could discourage investment, destabilize industries, and disrupt market competition.
The Consumers Association of Bangladesh (CAB) has already urged BERC to suspend the public hearing, arguing that the proposal would create unfair advantages and market distortions. However, BERC has stated that the proposal could still be rejected after considering arguments from all stakeholders during the hearing.
According to Petrobangla’s proposal, the gas price for new industries would rise by 152%, with the rate set at Tk 75.72 per cubic meter for both new and existing industries.
However, alternative pricing structures suggest rates of Tk 40 per cubic meter for new industries and Tk 42 per cubic meter for captive power generation, compared to the current rates of Tk 30 and Tk 31.75, respectively.
Petrobangla justifies the hike by citing the high import costs of LNG, which currently stand at Tk 65.70 per cubic meter. After adding taxes and charges, the cost reaches Tk 75.72 per cubic meter.
The agency estimates that if Bangladesh imports 101 LNG cargoes in the current fiscal year, it will face a deficit of Tk 16,161 crore, which could increase to Tk 22,315 crore if 115 cargoes are imported. Petrobangla expects the additional revenue from the price hike to begin flowing in two years, partially reducing the deficit.
Under the proposed pricing model, existing consumers with approved gas allocations would pay half their bill at the current rate and the other half at the new rate of Tk 75.72 per cubic meter.
For industries with promised gas load allocations, Petrobangla estimates a usage of 310 million cubic meters for industrial purposes and 290 million cubic meters for captive power. Of the total 600 million cubic meters, 300 million cubic meters would be charged at the higher rate, generating an estimated Tk 1,350 crore in additional revenue.
In total, the agency expects to earn Tk 2,300 crore from the hike, though this still falls short of its projected deficit.
Energy experts have expressed concerns over the plan. Dr. Ijaz Hossain, a former professor at the Bangladesh University of Engineering and Technology (BUET), acknowledged that while the price hike might initially create disparity, a uniform pricing model should be introduced for all consumers in the long term.
He also stressed the need for efficient energy use in industries to optimize costs.
Similarly, Dhaka University’s Professor Badrul Imam pointed out the complexity of the issue, noting that selling imported LNG at older rates results in losses, while the proposed pricing model creates unfair advantages among consumers. He argued that BERC should outright reject the proposal.
In a letter dated February 13, CAB urged BERC to suspend the hearing, citing years of unjustified cost escalations in the energy sector under previous administrations.
CAB argued that excessive spending had been repeatedly adjusted through subsidies and tariff hikes, leading to financial instability.
The organisation also pointed out that a 2023 amendment to the Bangladesh Energy Regulatory Commission Act had transferred energy pricing authority to the Ministry of Power, Energy, and Mineral Resources, a provision that was later revoked following public protests.
CAB made three key recommendations: BERC should determine the extent of excessive costs and financial mismanagement in the energy sector from 2010 to 2024, evaluate how much tariffs and subsidies could be reduced by eliminating unnecessary expenses and profits, and establish a tribunal led by a retired Supreme Court judge to prosecute financial irregularities in the sector.
The organization also argued that the proposed gas price hike contradicts both the regulatory framework and the spirit of recent public movements against unjustified price increases.
