Bulk electricity tariff likely to escalated by 15%-17% next week, as experts say public hearing on power hike became obsolete due to 

The government is likely to increase bulk electricity prices by 15%-17% from the second week of October, which will deal another blow to people already squeezed under inflationary pressure.

The hike is aimed to minimise the gap between electricity purchasing and selling rates of the Power Development Board, according to the Bangladesh Energy Regulatory Commission, as the move is set to dampen the consumer relief by Tk35 LPG price fall announcement by the commission for October. 

At a media briefing on Sunday, the regulator slashed the price of a 12 kg cylinder of liquefied petroleum gas (LPG) – mostly used for cooking at households and restaurants – to Tk1,200 for the current month thanks to Propane and Butane prices falling in the international market.

At present, the state-owned Power Development Board buys electricity in bulk at Tk3.46 kWt-Tk43.42kWt and sells to the distributors at Tk5.17kWt.    

After the hike, the board will sell per kWt electricity to the distribution companies at Tk6, said Power Development Board sources.

On 18 May, the energy regulator held the last public hearing on a bulk electricity price hike proposal of the Power Development Board. However, there has been no tariff announcement in the last three and a half months after the hearing.  

Energy Regulatory Commission Chairman Md Abdul Jalil told the Business Standard that they have a legal obligation to announce the new tariff within 90 working days of the hearing as 14 October is the deadline. 

"We are ready to announce the new bulk prices any day before the deadline," he said. He, however, did neither mention any specific date nor the hikes.

The last bulk electricity price was announced on 27 February 2020, when the energy regulator hiked the price by 8% to Tk5.17kWt from Tk4.77kWt. Then the board used to buy power at Tk3.46 kWt-Tk43.42kWt – the same at which it is now purchasing electricity.

At the public hearing in May, the board proposed to raise the bulk electricity tariffs by 66% to Tk8.56kWt. 

However, the technical committee of the energy regulatory commission prepared the tariff adjustment plan with a 15%-17% bulk power price hike, as Tk17,000 crore has been set aside as power subsidy for the Power Development Board for the current fiscal year, according to sources.

Experts said the energy regulator held the last public hearing against the backdrop of rising energy prices in the global market. But the international market situation has now changed, while the country is also facing scheduled power cuts. Therefore, there should be a rehearing for any tariff adjustment.      

Energy expert Prof Shamsul Alam said "The Power Development Board proposed the hike during the last hearing expecting a 7% generation growth, which did not happen. Instead of that, the government is supplying electricity with 17%-18% load shedding daily. So, the price adjustment order following the hearing has lost ground."

"If the energy regulatory commission truly respects its law, it should leave the existing tariffs unchanged," he added.