The Government is going to raise the price of oil and gas

The Government is going to raise the price of oil and gas and an announcement to this regard is likely to be made anytime.
Chief Adviser's Special Assistant for Power and Energy Dr M Tamim yesterday dropped the hint of price hike, triggering uproar among ordinary consumers and industrialists.
A number of household consumers and some leaders of business community yesterday expressed the apprehension that another price hike of energy would badly impact the economy and the people, who are already hit hard by unprecedented price hike of the essentials.
The consumers-household, industrial and commercial-started expressing their apprehension over telephone to different newspaper from yesterday afternoon, when the electronic media telecast the Chief Adviser's Special Assistant's statement justifying the possible price hike of energy.

A leader of the BGMEA said the countries export sector would lose competitiveness if the price of fuel oil and gas is enhanced, while an economist said it would trigger inflation and price spiral of essential commodities further.

Dr M Tamim dropped a broad hint saying the government was actively considering (upward) adjustment of oil and gas price against the backdrop of oil price in the international market that soared to nearly 140 dollars a barrel.

"We are assessing the impact of price adjustment on different sectors of the economy. But I should not say when such an announcement will come," he told journalists at the sideline of a seminar.

Dr Tamim spoke at the seminar on "The Need of Energy Producers and the Government's Perspective" at Hotel Sonargaon, organised by the International Business Forum of Bangladesh (IBFB). Its President Mahmudul Islam Chowdhury was in the chair.

The Government has doubled the price of compressed natural gas (CNG) barely a month ago. Now it is considering raising the price of gas used for commercial, industrial and residential purpose and also fuel oil, sources said.

During the last three days Dr. Tamim repeatedly hinted at the gas, fuel price increase making his position clear in favour of the move.

Petrobangla sells gas at Tk 7 per unit as against the present production cost of about Tk 70. The price was fixed on the basis of the production cost in 1975 when Shell had sold out its assets at US$ 10 million to Petrobangla the value of which now stands at more than US$ 1.2 billion.

"Should I sell a land at the same price now that my father had paid for buying in 1975?" Dr Tamim posed question at the seminar.

He informed the seminar that Petrobangla could not make regular payment to the IOC because of lower gas price. Similarly, BPC is selling fuel oil at old rates incurring heavy losses.

He admitted that it's not easy to raise energy price overnight inflicting a shock to the consumers and leaving an impact on the economy. "So, we have to wait and look into different aspects".

Focusing on the supply constraint of gas Dr Tamim felt it is temporary. The government has initiated move to go for more exploration through 3rd round bidding. "I hope, we will get gas from new exploration within next five years".

About the power crisis he said the government is formulating a new policy to set up large power plants through public-private partnership (PPP) as merchant power plant.

"We have already prepared a policy paper for PPP which is undergoing examination by various ministries," he added.

BGMEA President Anwar Alam Chowdhury Parvez recently demanded of the Government to introduce special (low) rate of fuel oil and gas price for the export sector. "Otherwise, the export sector will lose competitiveness and face negative situation in the already tough international market."