Publish: 11:31, 07 Jan, 2025 Updated: 17:37, 07 Jan, 2025

Gas Price

New factories face double costs in industrial sector

Online Desk
New factories face double costs in industrial sector
Photo - Collected

The government has decided to double the price of new connections in industries and captives, and the ministry already given in-principal approval.

Energy and mineral resources division expressed their desire of charging price in line with imported LNG. If the owners want to increase load in their industries then they will have to pay double the price, and Petrobangla has informed the decision to the industrialists.

Now the industrialists have to pay 30 taka per cubic meter and in captive power sector they have to pay 30.75 taka. On the other hand, the LNG import cost per cubic meter is 60-65 taka. Industrialists say the government is almost doubled the price promising of uninterrupted supply and the promised gas is not being delivered. On contrary, many factories have been closed due to the gas crisis.

They also fear of industry closure and a halt in investment if the price is increased more than twice during this crisis.

Citing a meeting held on 27th December, energy division sources said: “The gas price for new connections in the industrial and captive categories will be equal to the import cost of LNG.” However, for industrial and captive customers who have already received a connection commitment (initial consent letter/request letter issued), up to 50 percent of the gas price will be at the current price and the remaining 50 percent will be at the price of LNG.

The meeting also decided that if old industrial or captive customers want to increase their load, their additional gas price will be equal to the price of LNG.

Energy and mineral resources division’s decision will be sent to the Bangladesh Energy Regulatory Commission (BERC). For this, existing industrial and captive customers have been asked to send monthly statements (July 2023 to October 2024) detailing the excess gas consumption over the permitted load.

Petrobangla Deputy General Manager (Accounts) Md Abdul Jalil signed letter has been sent to directors of six distribution companies. The letter states that in order to send the above-mentioned proposal (redetermination of gas tariff) to the Bangladesh Energy Regulatory Commission, information regarding the amount of consumption exceeding the permitted load by existing industrial and captive customers is required. However, the letter asks for information as per the table.

Letter has been sent to distributor companies, said Mr Jalil, adding: “Now the decision will be implemented following the rules.”

Industrialists have opposed the decision. BKMEA [Bangladesh Knitwear Manufacturers and Exporters Association] President Mohammad Hatem said: “If the proposal is passed, it will create an unequal competition. Some will buy gas for 30 taka and some will pay double.”

The industrialist fears of new entrepreneurs’ survival and a standstill in investment.

Currently, Petrobangla supplies an average of 2.85 billion cubic feet of gas per day. Of this, an average of 850 million cubic feet is obtained from LNG imports. In the 2023-24 fiscal year, the average price of gas per cubic meter was Tk 24.38. Petrobangla sold it at Tk 22.87.

Petrobangla buys gas from Sylhet Gas Field at 1 taka per cubic meter, from Bangladesh Gas Field at 1 taka 25 paisa, from Bapex at 4 taka, and from Chevron and Tallo at 6 taka. In the 2023-24 fiscal year, the price of LNG imported from the spot market fell to 65 taka. The average price of LNG imported last August was 71 taka.

In February 2023, gas prices were increased by an average of 82 percent by executive order. At that time, the price of gas in industry was increased from 11 taka 98 paisa to 30 taka. In captives, it was increased from 16 taka to 30 taka. Later, the price of gas in captives was increased again to 30 taka 75 paisa.

Translate by Afsar Munna

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