Home Bangladesh Efforts to increase gas electricity water tariffs create anger
Bangladesh - February 26, 2022

Efforts to increase gas electricity water tariffs create anger

Golam Mostafa Jibon: Despite the reduction of people’s income during the corona pandemic, the evil effort to increase the prices of gas, electricity and water is going on throwing the low- and middle-income group of people at indescribable misery. As a result, agitation is prevailing among the people over the issue.
Sources said, the prices of daily commodities have become unbridled. Other costs of living have also increased. But people’s income is not increasing as a competitive level. The income of many people, who were affected by corona has decreased again. Some have lost their jobs. When people are hopeless due to various pressures, the utility service providing organizations have started pushing to increase the price of gas, electricity and water at a same time. This has created new panic in public life.
Experts said that, people will face a big crisis, if the additional value of these services is added to the price of goods. They said, it will have a direct impact on public life.
According to government estimates, gas prices have risen almost two and a half times in the last 11 years. At the same time, the price of electricity has increased by about 90 percent. Water prices have doubled in the last 12 years. But the quality of service of the service companies has not increased much at this time. Irregularities and corruption did not reduce. In such a situation, the consumer rights activists think that it is unreasonable to increase the price. The Bangladesh Energy Regulatory Commission (BERC) has also started public hearing on the proposal to increase gas prices from March 21.
Diesel prices have already gone up in the country and commodity prices have gone up in all cases. On top of that, with the rise in soybean oil prices, prices of all commodities have started to jump further. A large part of the private sector has become unemployed due to the direct effect of corona.
In 2009, the monthly bill for gas for two stoves was Tk 400. It has increased in five points to Tk 975. The growth rate was 143.75 percent. Distribution companies have proposed to raise the gas bill for two new stoves to Tk 2,100 this month. In 2009, the retail price of gas per cubic meter was Tk 4.34. Now it has increased by Tk 9.96, it has increased by 129 percent. Petrobangla has applied to increase the price by 117 percent this month.
Meanwhile, the government has increased the price of electricity 10 times in the last 11 years. At the consumer level, prices have risen by 90 percent.
In 2010, the average retail price of electricity per unit was Tk 3.07. The last increase was in March 2020 at Tk 7.13. Now another step has been taken to increase the price.
A recent survey by the BRAC Institute of Governance and Development (BIGD) and the Power and Participation Research Center (PPRC) found that, 32.4 million people in the country became newly impoverished during the corona period.
Economists said, rising electricity prices have a negative impact on almost all sectors of the country from agriculture, transportation, commodity prices and industrial production. The progress of the economy comes to a halt. In the meantime, the prices of daily commodities have gone beyond the purchasing capacity of the common people. If the price of gas, electricity and water is increased now, there will be a big disaster. For the people, who are crushed under the price rise, it will be seen as a ‘blow to the head’.
While there has been talk of raising prices to reduce losses, most gas and electricity companies are profitable. They are depositing thousands of crores of Taka in the government treasury every year. The government has earned about Tk 10,000 crore from the electricity and gas sector in the fiscal year 2020-21 as surplus money, tax-VAT and various fees. Gas companies have also paid dividends to shareholders. The salaries and bonuses of the officers and employees are also increasing year by year. The government increased the price of fuel oil in November last year. After that, the bus fare increases from 7th November. This puts pressure on the lower and middle classes, which are already under pressure from rising commodity prices. The government has increased the price of fuel oil six times in the last 12 years. As a result, at the end of 2009, the price of diesel was Tk 44 per liter, now it is Tk 80. Prices have risen by about 82 percent.
Experts said that, the cost of power and energy sector is increasing day by day due to mismanagement of government institutions, corruption and short-sighted decisions of policy makers. Entrepreneurs have to pay thousands of crores of Taka for the construction of power plants in excess of the demand. Opportunity has been created to import gas without paying attention to oil and gas exploration. The government is spending several thousand crores of Taka a year on this. Industry insiders said that, the initiative to raise prices without removing irregularities and without a realistic plan is basically a no-brainer to blame the government’s failure on the people.
Consumers Association of Bangladesh (CAB) has protested against the proposal to increase the price of water after gas and electricity. In a recent virtual meeting, the organization protested, saying that in the last 10 years, the prices of essential commodities in the country have increased three times. In the meantime, it has been proposed to increase the price of electricity by 67 percent. Last year, due to lack of gas, a subsidy of Tk 9,000 crore was given for generating electricity in fuel oil. Bringing LNG in the fuel crisis and adjusting its price will further increase the cost of electricity. Taking this into consideration, it has been proposed to increase it by 67 percent. In the case of domestic gas, Bangladesh Gas Field and Sylhet Gas Field have proposed 50 percent price hike. Each of them is a for-profit organization, yet they are desperately trying to raise prices. Petrobangla is now in a profitable position as subsidies in the gas sector as a whole have come down drastically. By importing LNG from the spot market and coordinating with CNG, they have proposed to increase the price by 117 percent even though it is profitable.
Meanwhile, the transmission-distribution companies are raising prices even though they are all profitable. The leaders of CAB said that, Dhaka WASA has chosen to reduce the subsidy by imposing all the responsibility of extravagance, mismanagement and corruption on the consumers. Although, WASA is a non-profit organization, it now focuses more on trade than services.
Even during the corona epidemic, the price of Dhaka WASA water was increased in April 2020. Then in September 2021, the price goes up again. In these two phases, the price of water per 1,000 liters was increased by Tk 3.61 (31 percent). Tk 4.96 was increased for commercial use (13 percent). The company, which was set up to provide much-needed services to the people, wants to raise the price of water by 20 percent again to raise money for the deficit. While it is possible to adjust the deficit money by reducing the company’s unnecessary expenses, there is no need for price increase.
Explaining the reason for the increase in oil, gas and electricity prices, Dhaka WASA has shown that the production cost per thousand liters of water is Tk 25 and they are selling it at Tk 15 less than Tk 10.
The government subsidizes this money, which it no longer wants to pay.
CAB’s energy adviser M Shamsul Alam said, “Our backs are stuck to the wall. We can’t stand inflation. The Prime Minister said, the government could no longer provide subsidies. We want to say in unison with her, we can no longer tolerate this price increase. Regarding the salary increase and bonus of WASA MD and officers, he said that, the private sector, business organization can only increase the salary of individuals. By increasing the salary of the person with whom they can earn as much as possible, they increase the efficiency of that person.”
He also said, “Companies are always government owned and owned by the people. The government supervises the ownership of the company on behalf of the people. The salaries and allowances of any company will not be outside the government rules, government policies, there will be no facilities outside the government rules, those who are ex-officio chairman of the board here, they will not get any meeting allowance, if there is any TA-DA they will take it from the government. Because of there we pay tax-VAT. All the sectors like oil, gas, water, electricity which are not profitable, those sectors which have to be subsidized by the government and those sectors have to be free from government duty.”
He further said,”There was a reserve of Tk 1,00000 crore in the gas and power sector, which the government has taken away by law. Fuel oil has made a profit of Tk 44,000 crore without adjustment. In addition, consumers are paying Tk 1,500 crore a year to the Gas Development Fund, but that money is not being used as an investment in gas development. These government-owned companies are embezzling money in the same way that unscrupulous businessmen do in the private sector.”

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