15.43pc hike in retail power tariff proposed

Staff Reporter :
The technical committee of Bangladesh Energy Regulatory Commission (BERC) has recommended to increase the electricity price by Tk 1.21 per unit at the consumer level in the country.
Currently the retail price of electricity is Tk 7.02 per unit and the BERC technical committee has recommended for Tk 8.23 per unit by increasing Tk 1.21.
The recommendation was made upon the proposals submitted by six state-owned power distribution companies for raising the power tariff about 20 per cent at the retail level.
A day-long public hearing was held in this regard in the city’s BIAM Auditorium on Sunday.
But, the BERC’s technical evaluation committee has recommended for raising electricity price at consumer level by 15.43 per cent.
Six state-owned power distribution companies moved to submit their proposals after the BERC’s decision to hike the bulk power tariff by 19.92 per cent with effect from December 1 last year.
Earlier in February 2020, electricity prices were increased at all levels. At that time, the wholesale price was increased by 8.4 per cent and the retail level was increased by 5.3 per cent.
As per that decision, the retail power tariff was increased from Tk6.77 to Tk7.13 per unit (each kilowatt-hour) in March 2020.
Meanwhile, Dhaka Mass Transit Company Ltd (DMTCL) and the high-tech park authorities of the country have demanded for affordable power supply from distributors.
All the six state-owned power distribution companies which submitted their respective proposals for raising retail power tariff in subsequent of the bulk power tariff hike are-Bangladesh Power Development Board (BPDB), Bangladesh Rural Electrification Board (BREB), Dhaka Power Distribution Company Limited (DPDC), Dhaka Electric Supply Company Limited (Desco), Northern Electricity Supply Company PLS (Nesco), West Zone Power Distribution Company Limited (WZPDCL).
As per the latest statistics, the financial loss of state-owned BPDB, the principal organisation in power sector and also the single buyer of electricity from private sector power plants, is likely to increase by Tk18,094 crore in one year.
According to BPDB’s own latest estimates, the financial loss will cross Tk48,000 crore in the 2022-23 fiscal year from Tk29,915 crore in the fiscal year 2021-22, an increase of almost 67 per cent.
Sources said the BPDB’s revenue deficit has further increased due to its purchase of electricity at higher price and sale at lower price, the hike in petroleum fuel prices and also the price escalation of US dollars.
Officials said the recent 19.92 per cent hike in the bulk tariff may help the BPDB to reduce its loss by only Tk5,000 crore while a huge revenue deficit will remain a big burden.
On the other hand, the bulk power tariff hike puts pressure on power distribution companies to submit their retail tariff hike proposal to the BERC to cover their own revenue gaps.
Officials said the Power Division is under tremendous pressure from the Finance Ministry to raise power tariff in bulk and retail to cover its huge financial losses.
The recent commitment of the International Monetary Fund (IMF) to provide a $4.5 billion loan has increased the pressure as the donor agency has tagged a condition to decrease subsidy in the power sector and raise power tariff to cover the losses, said a Power Division official.