Higher prices of LPG and fuel have already put consumers under pressure, and now electricity bills are set to increase further, adding to household expenses.
The government is scheduled to hold public hearings on May 20 and 21 over proposed electricity price hikes. However, the latest move to raise electricity prices could place additional pressure on lower middle-class and middle-class consumers.
This time, the Bangladesh Power Development Board (PDB) is not only proposing an increase in electricity tariffs per unit but also seeking changes to the long-standing slab-based pricing system for residential consumers.
The move is aimed at increasing the organisation’s revenue. If implemented, low and fixed-income consumers are expected to suffer the most. Many consumers who currently enjoy lower electricity rates under the slab system may lose that benefit.
According to PDB estimates, around 35 percent of consumers will face higher bills due to the restructuring of the slab-based system. Among them, 23 percent belong to lower middle-class families.
PDB official Mohammed Nurul Absar told Bangladesh Pratidin that no proposal has been made to increase electricity prices for lifeline and first-tier consumers.
“In the new proposal, instead of keeping the slab from 76 to 200 units, we have proposed a slab from zero to 200 units. Through this, PDB will earn an additional Tk 26.57 billion annually,” he said.
He added that due to government policies, PDB is currently incurring annual losses of around Tk 630 billion.
“We are producing electricity at Tk 13 per unit but selling it at Tk 7 per unit, meaning each unit is being sold at Tk 6 below the production cost. To reduce the subsidy burden, we have proposed restructuring the billing slabs for residential consumers,” he said.
According to PDB data, Bangladesh currently has more than 43.1 million residential electricity consumers. Of them, 43 percent are lifeline consumers who use up to 50 units of electricity, while another 22 percent use up to 75 units.
More than 10.05 million consumers use between 76 and 200 units, while the remaining 12 percent consume between 200 and over 600 units under four higher slabs.
Under the existing slab structure, consumers using up to 50 units receive the lowest tariff, while those using up to 75 units fall under the first slab category.
According to the proposal, prices for lifeline and first-tier consumers will remain unchanged. However, consumers using more than 75 units will have to pay higher rates.
Currently, consumers using between 76 and 200 units are charged under the second slab. PDB has proposed replacing this slab with a new range from zero to 200 units. As a result, these consumers will lose the lower-rate benefit for the first 75 units.
Under the new proposal, once consumption exceeds 76 units, the entire usage up to 200 units will be charged at the higher second-slab rate.
For example, a consumer using 80 units of electricity will no longer receive the lower tariff benefit for the first 75 units.
A large section of electricity consumers in the country use basic household appliances such as refrigerators, lights, fans and televisions. As a result, the proposed decision will create additional financial pressure on the 23 percent of consumers within the 76-200 unit category, most of whom belong to lower-income groups.
Under the current system, a consumer using 200 units pays Tk 394.50 for the first 75 units at the first-tier rate of Tk 5.26 per unit.
The remaining 125 units are billed at the second-tier rate of Tk 7.20 per unit, adding Tk 900. Altogether, the current bill stands at Tk 1,294.50.
However, if the new proposal is implemented, the entire 200 units will be billed at the second-tier rate. In that case, the bill will rise to Tk 1,440, increasing by Tk 145.50 due to the slab restructuring alone.
In addition, PDB has proposed increasing the second-tier rate from Tk 7.20 to Tk 8.20 per unit. If approved, a consumer using 200 units will have to pay Tk 1,640 per month, meaning the bill will rise by Tk 345.50.
Demand charges and VAT will also be added to the bill.
Vice-Chancellor of Independent University, Bangladesh and energy expert Professor Dr M Tamim told Bangladesh Pratidin that the highest electricity subsidy is currently being provided in the 76-200 unit slab.
“The initiative has been taken to reduce subsidies in this category. The maximum subsidy is being provided to low-income and lower-middle-class consumers under this slab. However, both low and relatively higher users are benefiting from the subsidy,” he said.
He added that rising costs of transport, fuel and cooking energy, combined with higher electricity prices, would undoubtedly affect the lives of low-income people.
Bd-Pratidin English/ AM
