Home Power & Energy Power prices increased by 183 pc in 15 years
Power & Energy - January 3, 2024

Power prices increased by 183 pc in 15 years

Mahfuz Emran: The average production cost of electricity has quadrupled in 15 years. This push of cost increase could not be met by subsidies. For this reason, the price of electricity has been increased. Last March, the price of electricity increased at the consumer level. And bulk power prices were last hiked in February last year. In this, during the tenure of the current government, the price of bulk electricity has increased 10 times and increased 12 times at the consumer level. In this, the price of bulk electricity has increased by about 183 percent and at the consumer level by 121 percent.
An analysis of the electricity price increase shows that in October 2008, the bulk electricity price was increased by Tk 2.37. Earlier it was Tk 2.04. That is, when the current government took power in January 2009, the price of bulk electricity was Tk 2.37. Currently it stands at Tk 6.70. That is, the price has increased by 182.70 percent.
Meanwhile, at the beginning of 2009, the price of electricity at the consumer level was Tk 3.73. Currently it is Tk 8.25. According to this, the price of electricity at the consumer level has increased by 121.17 percent. However, if the subsidy is reduced due to the loan conditions of the International Monetary Fund (IMF), the price of electricity will increase again after the twelfth national election, said those concerned.
According to information, after the Awami League government assumed power, the bulk price was increased three times in 2011 when the cost of electricity production increased. The first bulk rate hike was 11 percent in February that year. The price is Tk 2.63. In August, the price was increased by 6.66 percent. This increases the price by Tk 2.80. And in December, it was increased by 16.79 percent to Tk 3.27.
In 2012, the wholesale price of electricity was increased three times. In February that year, the bulk price was increased by 14.37 percent. The price is Tk 3.74. In March, the price was increased again by 7.49 percent. It increased the bulk price by Tk 4.02. And in August, it was increased by 16.92 percent to Tk 4.70. However, due to more sales in rural electricity societies, the bulk price decreased slightly to Tk 4.67. Electricity prices were not increased for several years after that.
In September 2015, the bulk rate was increased by 4.93 percent to Tk 4.90. However, due to the sale of more electricity to Seba Palli Vidyut Samiti, the bulk price decreased slightly to Tk 4.87. However, although the Power Development Board (PDB) proposed to increase the price of electricity in 2017, it was canceled by the Bangladesh Energy Regulatory Commission (BERC). Instead of increasing the price of the service, BERC reduced it. At that time, the rate was set at Tk 4.84.
After that, the bulk rate was not increased again for three years. However, at this time, due to the sale of more electricity to the rural electricity societies, the bulk price decreased slightly to Tk 4.77. In March 2020, the bulk price of electricity was increased by 8.40 percent. In this, the bulk price increased by Tk 5.17. Until now, BERC used to increase electricity prices on the basis of public hearings.
However, since December 2022, the power department has been increasing the price of electricity by executive order. Bulk rates were increased by 19.92 percent that month. The bulk price has increased by Tk 6.20. And lastly in February last year wholesale electricity price was increased by 8.06 percent. In this, the price of bulk electricity stands at Tk 6.70.
An analysis of the price increase data shows that after the 2007 increase, the average price of electricity supplied at the consumer level till February 2010 was Tk 3.73. In March that year, it was increased by five percent to Tk 3.92. The next year (year 2011) the price of electricity was increased twice at the consumer level. Out of this, it was increased by 5 percent in February and 13.25 percent in December. The average price of electricity has increased to Tk 4.67. Retail electricity prices were increased twice in 2012. Out of this, there is an increase of 7.09 percent in February and 15 percent in September. In September 2012, the average price of electricity increased to Tk 5.75.
Then in March 2014, the price of electricity at the consumer level was increased by 6.96 percent to Tk 6.15. And in September 2015, it increased by 2.93 percent to Tk 6.33. In December 2017, the price of electricity at the consumer level was again increased by 5.30 percent. At that time the average price of electricity was fixed at Tk 6.85. It was then that uniform rates were fixed for all electricity distribution companies. As a result, electricity prices increase at a higher rate in rural areas than in Dhaka. As a result of this, the price changed slightly to an average of Tk 6.77.
On the basis of the revised tariff, the average price of electricity at the consumer level was increased by 5.30 percent in March 2020. The average price is Tk 7.13. Since then, the electricity department has been announcing hike in electricity prices at the consumer level. Among them, the average price of electricity was increased by five percent in three consecutive months last year. In March, the price of electricity at the consumer level increased to Tk 8.25. Three times the price increase was announced ignoring the public hearing.
Incidentally, when the Awami League government assumed power in the fiscal year 2008-09, the average cost of power generation in the country was Tk 2.53. In 15 years it has increased to Tk 11.04 in 2022-23 fiscal year. If you add other expenses to this, the current electricity supply price will reach around Tk 12. According to this, if the subsidy is brought down to zero, the price of bulk electricity will have to increase by about 80 percent. And the price of electricity at the consumer level should be increased in proportion to the increase in bulk price.

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