Bangladesh Energy Regulatory Commission has suggested submitting proposals for gas tariff hike as per the BERC act, a BERC member confirmed.
“The top officials of Energy And Mineral Resources Division (EMRD) expressed their concern over pricing issues after LNG import and sought our cooperation in this regard,” BERC member Md Abdul Aziz Khan told the daily sun yesterday after a meeting with EMRD officials.
BERC chairman Monowar Islam, EMRD secretary Nazimuddin, Petrobangla chairman Abul Monsur M Faizullah and senior officials concerned attended the meeting.
“BERC will look into the pricing issues after getting formal proposal from gas distribution companies,” BERC member Md Abdul Aziz Khan told the daily sun over phone.
The government is planning to raise gas tariff once again to cope with the costly import of liquefied natural gas (LNG) due this fiscal.
LNG is currently selling at Tk 13.52 per cubic meter in international market whereas locally produced natural gas costs Tk 7.35 per cubic meter.
The government will need around Tk 14,000-15,000 crore for importing 1000mmcfd of LNG in current fiscal. The cost will be doubled after the government starts importing LNG through India’s Reliance and Petronet from 2021, officials said.
MERD is planning to import another 1000mmcfd of LNG after 2021.
The government has earlier decided to take hard-term loans from the International Islamic Trade Finance Corporation (ITFC) to meet the financial needs for LNG import.Another Tk 7,000 crore will come from the revolving fund under the Energy Security Fund.
A high-powered team, led by additional Economic Relations Division (ERD) Secretary Mahmuda Begum, will visit Saudi Arabia soon to discuss the loans with ITFC officials.
The ITFC has already shown interest in lending $500 million to Bangladesh for LNG import.
However, State Minister for Power and Energy Nasrul Hamid said the government has no plan to hike natural gas once again ahead of the national election.
The government hiked gas prices by a weighted average of 22.7 percent on February 23 last year.
According to Petrobangla’s estimation, the country has a remaining gas reserve of 12.39 trillion cubic feet in its 20 gas fields. The state-run oil and gas company also proposed importing LNG to meet the growing demand for fossil fuel.
The demand for natural gas in the country has been estimated at 3781mmcfd in 2017-18 fiscal against the supply of 2745.8 mmcfd.
BPC has planned to borrow $700 million from the ITFC to import fuel in 2018. The tenure of the loan will be six months from the date of disbursement and at an interest rate of 3.8 percent with a letter of credit (LC) issuance fee of 0.20 percent.
The government wants to borrow the funds for LNG import at the same rate, officials said.