Bulk power price to go up
Economists fear the move will add more burden on people, who are already squeezed under inflation
Bulk electricity price is set to increase as the Energy Regulatory Commission (BERC) is expected to make an announcement in this regard today, following which the process of raising prices at the consumer level will begin, say sources.
Meanwhile, electricity distribution companies are requesting to increase retail prices of electricity too.
Economists fear the move will cause more misery in the lives of people who are already under severe strain due to increasing prices of goods.
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Sources say, one of the International Monetary Fund (IMF) conditions for loan is to reduce subsidies in the power and energy sectors and the price hike is coming as part of that process, although the BERC rejected the move just 38 days ago.
Insiders say, the price is not increasing as per the wishes of the government in the current situation. But, there is pressure from the IMF prompting the move.
On 12 January, the Power Development Board (PDB) proposed a hike in bulk electricity prices. The company asked for a price hike of around 66%. A public hearing on their proposal was held on 18 May. BERC's technical committee at the hearing recommended a 58% price hike. After nearly 5 months, in an announcement on 13 October, the BERC said, considering the overall situation and as the PDB failed to show any rational reason, the application has been rejected.
The IMF delegation that visited Dhaka held a meeting with PDB and Power Division on 2 November and the BERC on 6 November. The meetings discussed electricity prices, subsidies and PDB's losses.
Last week, the PDB applied for reconsideration of the commission's order. The commission is going to issue a new order considering the company's application.
BERC Member (Electricity) Mohammad Bazlur Rahman told the media that PDB has provided necessary explanations and information regarding the deficiencies due to which PDB's proposal was rejected.
He said, "Electricity prices are increasing."
He, however, did not comment on how much the price would increase. "It will not increase as much as PDB asked for," he said.
Sources say that electricity prices may increase by 15 to 20% at the bulk level. For the current fiscal year, the price is being increased by taking a subsidy of Tk17,000 crore in the electricity sector.
Consumers Association of Bangladesh (CAB) Energy Adviser Prof Dr M Shamsul Alam told the media that without a public hearing, the order to increase the price of electricity will not be lawful.
About this, Bazlur Rahman said the order was given after hearing and the PDB appealed against that order. So there is no need for another hearing.
Retail prices will also rise
Distribution companies have also asked to increase electricity prices at the consumer level on the news that bulk prices are going up. Price at customer level depending on how much the bulk electricity price will increase.
BERC will announce the new price after hearing the proposals of six distribution companies.
Engineer Bikash Dewan, managing director of Dhaka Power Distribution Company Limited said, they have not yet proposed the retail price adjustment.
However, price hikes will be proposed at the rate at which bulk prices increase, he said.
Other distribution companies are also reportedly considering the same.
