Wholesale price of electricity may increase this week

Dhaka, September 4 – The Bangladesh Energy Regulatory Commission (BERC) may announce an increase in the wholesale price of electricity this week. According to BERC sources, the government has recently confirmed the subsidy of Tk 17000 crore to keep the price of electricity affordable at the consumer level. There is no clear information on the exact percentage increase in wholesale electricity prices. However, considering the government’s subsidy, the price of electricity may increase in a small range.

Meanwhile, on May 18, BERC held a public hearing on the increase in wholesale (bulk) price of electricity. However, there is an obligation under the law to announce the pricing within 90 working days of the public hearing. Accordingly, the scheduled time of BERC ends in the middle of this month.

When asked, BERC member (electricity) Mohammad Bazlur Rahman said, ‘The issue of subsidy is related to determining the price of electricity. Recently, it has been reported that the government has given 17 thousand crores of electricity subsidy. Hence, the announcement of the new price of wholesale electricity will be announced within this week or next week. Electricity prices are not likely to increase much due to government subsidies, may increase in a small range. ‘

According to Bangladesh Power Development Board (BPDB) sources, BPDB had proposed to BERC in February this year to increase the wholesale price of electricity. The commission held a public hearing on the proposal on May 18. At that time, BPDB proposed a 69 percent hike in electricity prices to eight taka 58 paisa per unit. Apart from this, if the price of gas increases by 100 percent, it offers 9 14 paise per unit and 9 27 paise in case of 125 percent increase. At present, the wholesale price of each unit of electricity supplied by BPDB is on an average 5 taka 17 paisa. In the public hearing, BERC’s technical committee recommended a 58 percent increase in electricity prices without subsidy. In the public hearing, BPDB argued that the cost of power generation is more than Rs 9 per unit. In this, BPDB incurred a loss of Tk 30 thousand crores in the financial year 2021-22. In view of this, BPDB proposed to increase the current rate of electricity from 5 taka 17 paisa to 8 taka 58 paisa per unit.

Meanwhile, the electricity distribution companies are preparing to increase the price of electricity at the retail level after the public hearing on the proposal to increase the wholesale price of electricity. BPDB is the single wholesaler of electricity in the country. Five companies in the country are buying electricity from BPDB and distributing it to consumers or at retail level. These are DESCO, DPDC, REB, Nesco and Ozopadico. BPDBO is also supplying electricity to some areas of the country.

The managing director (MD) of an electricity distribution company in the capital said on the condition of anonymity, “There is a direct relationship between the wholesale price of electricity and the price at the retail level. So we are prepared to offer retail level pricing. We will submit our proposal to BERC at the rate at which wholesale prices will be increased. ‘

According to the sources of the electricity department, the price of electricity has increased 9 times in the last 12 years in the country. At this time, the price has been increased by 118 percent at the wholesale level and 90 percent at the consumer level.

An official of the electricity department said, “On August 5 of this year, the price of fuel oil was increased from 42 to 52 percent and last June, the government increased the price of gas by an average of 23 percent. ‘

Source: Voice of Time
IA/ 4 September 2022

Tags: Wholesale price electricity increase week

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