The government has started increasing the price of electricity. Bangladesh’s Power Development Board (PDB), the top government body in the sector, wants to increase the wholesale price of electricity by about 69 percent.
Distribution companies have said that retail prices will also increase when the wholesale price of electricity is increased. In November, the price of diesel and kerosene is effective and this initiative was taken to increase gas prices in the proposal to increase gas prices this January.
According to BERC (Bangladesh Energy Regulatory Commission) and PDB sources, discussions have been going on for the last few months in the concerned quarters of the government to increase the wholesale and retail prices of electricity due to rising production costs. Following that, last week, the PDB sent a proposal to the regulatory body of the sector, Bangladesh Energy Regulatory Commission, to increase the wholesale price of electricity.
The next day after receiving their letter, the BERC sent a letter stating that the price increase proposal was not per the rules and proposed to send it again following the rules and regulations. Concerned PDB officials are now making proposals as per his instructions. A PDB member said that it would be sent to BERC this week.
Also Read: Gas Prices Rise 117 Percent!
PDB is the only one in the country that sells electricity at wholesale prices. After generating electricity in the centers, PDB buys it at the contract price. The company sells that electricity to the distributing companies at wholesale prices. In between, Power Grid Company (PGCB) charges wheeling charges.
Following the recent price adjustment process of electricity, it is seen that the process of increase in retail price starts immediately after the increase in wholesale price. Later, BERC announced a price hike at the same time.
BERC chairman Abdul Jalil said, “I have received an application from the PDB to increase the wholesale price of electricity. But it was not appropriate according to the regulations. As a result, I sent it back the next day.” As per the rules, he has been asked to propose again. However, he has not yet received the offer.
According to the Power Development Board, PDB has recorded a record loss in the history of the company in the last financial year due to the crisis of domestic gas and rising prices of LNG and fuel oil in the world market. Oil prices continue to rise this year, and local gas supplies are expected to decline further. If electricity is sold and supplied at the existing rates, the number of losses will increase more than ever before. Power plants have to pay the price as well as supply to the customers. So the government has to subsidize the losses. So it has been proposed to increase the price.
A top official of the Power Development Board said the financial issues would remain almost the same as in the revised proposal of the PDB. Logic and mathematical calculations will be performed just by following the rules.