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Proposal for gas, power price hike turned down

Energy ministry to put forward revised formula soon

Staff Correspondent
The Economic Affairs Council of the government yesterday rejected an energy ministry proposal for a massive increase in gas and power prices for most consumers.
Sources said the council meeting chaired by Finance and Planning Minister M Saifur Rahman termed the proposal as "unrealistic" and "inconsistent with the socio-economic condition".
The finance minister also maintained that the proposed gas pricing formula was 'flawed'.
He noted that if the proposal was sent again in future, it should at first be reviewed on the basis of social factors, not just economic factors.
The ministry, under pressure from the donors to increase price, has already started working on a revised formula that is likely to be placed before the council for approval within a few weeks, sources said.
State Minister for Energy Mosharraf Hossain later told journalists that the council had a look at the proposed pricing but made no decision. The ministry would work on it further and come up with a revised pricing formula, he said.
"We had prepared a permanent draft policy for pricing of gas, power and fuel," he said adding that there is no such policy in place.
State Minister for Power Iqbal Mahmud said there is no reason to be concerned about this pricing issue.
The energy ministry earlier formed a gas pricing committee with experts from the Hydrocarbon Unit and Petrobangla that came up
with a six-yearly pricing formula on a 'commercial' basis.
The proposed new price sought to push up domestic gas rate to Tk 169.39 per 1000 cubic feet (cft) or per unit from the present rate of Tk 120. Gas rate for power plants under the Power Development Board (PDB) has been proposed at Tk 88.40 per unit instead of the present Tk 70. Fertiliser factories were to pay Tk 84.41 per unit instead of the present Tk 60.
The proposal however cuts down gas rate for small-scale private power plants to Tk 93 per unit from Tk 100. Price for captive power generation was also to come down to Tk 99.24 per unit from the present Tk 100. Gas price for industries would have been slashed down to Tk 99.24 per unit from the present rate of Tk 140.
Commercial consumers were to pay Tk 177.38 for per unit of gas instead of the present Tk 220 and brick kilns Tk 104.37 against the present rate of Tk 220.