Energy Bangla

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Dhaka Monday,  Feb 6, 2023

Retail Power Tariff Hiked By 5%

EB Report/UNB

The government has raised the electricity tariff by 5 percent at the retail level.

Now the average tariff for all consumers will go up by Tk0.36 to Tk7.49 from Tk7.13, the Power Division said in a media statement Thursday.

The tariff for lifeline consumers, who use up to 50 units (kwh) a month, was raised by Tk0.19 to Tk3.94 per unit from Tk3.75.

The new tariff will be effective from January 1.

The monthly demand charge was also raised for different types of consumers.

The tariff was raised through an administrative order, issued by a gazette notification in the evening.

The decision to raise the power tariff at the retail level was taken under the new amendment to the BERC Act, which allowed the government to take any decision in this regard bypassing the regulator’s jurisdiction.

However, the Power Division’s 19-page gazette notification did not say anything about the average hike in tariff or its increase in percentage.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid clarified it saying the electricity tariff was raised by Tk0.19 per unit at the retail level, 5 percent up from the existing one.

Nasrul also said the tariff will be adjusted every month from now on.

“We had to raise the tariff to cover about 20 percent hike in bulk level while the government subsidy was also taken into consideration,” he told UNB. “In this fiscal year, the government will have to provide Tk28,000 crore as a subsidy, which was Tk17,000 crore in the last fiscal year.”

Justifying the 5 percent hike in retail tariff, the state minister said that the government had to go for upward tariff adjustment because of the growing energy prices globally. “The coal price has gone up to $250 per metric tonne, which was only $90 per MT last year.”

Earlier, BERC raised the bulk power tariff by about 19.92 percent on November 21 with effect from December 1.

After that, six power distribution entities submitted their respective proposals to BERC seeking a similar, 19.44 percent, hike in retail power tariff at the consumer level.

But within a week, the cabinet on November 28 approved an amendment to the BERC Ordinance 2022, allowing the government to set fuel tariffs on its own under special circumstances without having to wait for the commission’s public hearing and decision.

Earlier, during a public hearing, the technical evaluation committee (TEC) of BERC recommended raising the weighted average tariff of electricity by 15.43 percent at the retail level against the demand of the distribution companies for hiking it by about 20 percent.

The committee suggested setting the weighted average retail tariff at Tk8.23 against the existing Tk7.13 per unit (each kilowatt hour) with a hike of Tk1.10 per unit.

Consumers Association of Bangladesh Vice-President Professor M Shamsul Alam called the power tariff hike by the government’s raising with an administrative order a “bad example,” which will “encourage corruption and irregularities in the power sector.”

This move will be detrimental to ensuring accountability and transparency which is being established by BERC’s public hearing, he said.

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