Govt hikes distribution charge of Titas

After six months of the country's highest-ever retail gas price hike, the government has now increased the distribution charges for gas production, transmission, and distribution companies.

The additional charges will be effective for gas consumption in July, as stated in separate orders issued by the Energy and Mineral Resources Division of the Ministry of Power, Energy, and Mineral Resources on Thursday.

According to the order, Titas Gas Transmission and Distribution Company Limited, the largest and only gas distribution utility in the country, will earn an additional Tk0.08 per cubic meter (CM) of gas sales, as its distribution charges have been increased to Tk0.2100 from Tk0.1300 per cubic meter.

However, the increased charges will not impact consumers as they will be sourced from the retail rate, which was hiked on 18 January this year.

At that time, with the help of the amended form of the Bangladesh Energy Regulatory Commission Act – which allows the Power Energy and Mineral Resources Ministry to set all kinds of energy prices, bypassing the regulator's jurisdiction at any time – gas prices were hiked by a staggering 179%, with an eye on eliminating subsidies and cutting the fiscal deficit.

Apart from the increase in gas distribution companies' charges, the Energy and Mineral Resource Division also raised the transmission charge per unit of gas by Tk0.54 to Tk1.02 CM from Tk0.48CM.

The wellhead margin for state-owned gas production companies was also increased.

As per the new order, Bangladesh Petroleum Exploration & Production Company Limited (BAPEX) will receive Tk4, while Bangladesh Gas Fields Company Limited (BGFCL), and Sylhet Gas Fields Limited (SGFL) will receive Tk1 each, for producing per cubic meter of gas.

At present, Bapex gets Tk3.0414 per CM, while BGFCL gets Tk0.7097 and SGFL Tk0.2028 per CM.