BERC recommends to increase electricity price

Publish: 7:47 PM, May 19, 2022 | Update: 7:47:PM, May 19, 2022

Safiqul Islam (Jami)
The technical team of Bangladesh Energy Regulatory Commission (BERC) has recommended to increase the price of electricity in the country by 57.83 percent as opposed to the proposal of Power Development Board (BUBO) to increase the price by 65.57 percent. The recommendation was made at a public hearing at the BIAM Foundation auditorium in the capital on Wednesday (May 18). However, the technical committee of BERC has recommended to increase the wholesale price of electricity if the subsidy price is the same as before.
BERC Chairman Abdul Jalil, Member Maqbool E Elahi, Abu Farooq, Director General of Power Development Board, Director and officials at different levels were present there.
The government is currently subsidizing the wholesale rate by TK 3.39 per unit. The Power Development Board (BUBO) is selling at a wholesale rate of TK 5.17 per unit. To avoid subsidies, BUBO has proposed to increase the price of electricity by TK 3.39 per unit to TK 8.58 per unit. In view of this, BERC has recommended to increase the price of electricity by TK 2.99 per unit to TK 8.16.
BERC last fixed the wholesale price of electricity at TK 5.17 per unit in February 2020. Bangladesh Electricity Development Board (BPDB) is the sole wholesaler of electricity.
BPDB is generating its own electricity as well as importing power from abroad and buying power from privately owned power plants. It has been selling at wholesale prices to 5 distribution companies. And they are distributing in the urban areas of Mymensingh, Sylhet and Chattogram divisions.
BPDB’s proposal to increase the wholesale price has said that the cost of generating electricity from oil has gone up due to non-availability of gas supply as per demand. In 2019-2020 FY, the average production cost of electricity was TK 2.13 and in FY 2020-21 it increased to TK 3.16.
Due to increase in fuel price and increase in coal VAT, the production cost per unit in 2022 will be TK 4.24. If the wholesale price does not increase, BPDB will lose 30 thousand 251 crore 80 lakh taka in 2022. PDB’s proposal to increase the wholesale price has said that the cost of generating electricity from oil has gone up due to insufficient supply of gas.
The BERC chairman said, “The question may arise as to why we are holding a hearing on electricity prices without announcing a public hearing on gas prices.” As you know, with the rise in prices comes the issue of government policy decisions, which is a matter of documentary evidence. The process is continuing. In the end, the price of gas will be decided.
He said the commission was holding a public hearing on the electricity price adjustment proposal due to its legal procedures. The announcement of wholesale prices will have an impact on retail. We have not received any offer from them. The latest wholesale price of electricity was fixed at TK 5.17 per unit in February 2020.