Fresh power tariff hike may hit consumers

Consumers across Bangladesh may soon face another financial burden as electricity tariffs could rise again amid mounting pressure on the country’s power sector.

The Bangladesh Power Development Board, along with transmission and distribution utilities, has proposed a 17 to 21 percent increase in electricity prices.

The Bangladesh Energy Regulatory Commission has formed a technical committee to review the proposals and scheduled public hearings on 20 and 21 May at the Krishibid Institution Bangladesh Auditorium in Dhaka.

Power sector officials say the proposed hike is aimed at reducing the widening gap between electricity generation costs and the prices currently charged to consumers.

Rising fuel import costs, growing subsidy pressure, and capacity payments to underused private power plants have sharply increased financial stress in the sector.

According to the report, Bangladesh’s dependence on imported primary energy rose from 47.7 percent in FY21 to 62.5 percent in FY25, while the average cost of electricity generation jumped from Tk6.61 to Tk12.1 per kilowatt-hour over five years.

Energy experts warn that another tariff hike could deepen hardship for households and businesses already struggling with inflation.

They also say the government must reduce dependence on costly fossil fuels and speed up investment in renewable energy, especially solar power.

Speaking to the New Nation Shafiqul Alam, said that if the proposed tariff hike is approved, households and businesses already struggling with inflation and rising living expenses could face additional financial hardship.

“Maintain tariff adjustments are necessary to sustain electricity generation and maintain uninterrupted supply amid escalating fuel import costs and rising subsidy liabilities.”

A recent IEEFA report urged Bangladesh to expand renewable energy, import hydropower from regional partners, reduce transmission and distribution losses, and encourage private investment through duty waivers and stronger payment guarantees.

For now, all eyes are on the upcoming public hearings, where regulators will decide whether consumers will have to pay more for electricity in the coming months.

To support the transition, the study recommended large-scale hydropower imports from Bhutan, India and Nepal under the BBIN regional framework.

The report also said, importing 6,000MW of firm hydropower capacity after 2030 could save Bangladesh around 257 billion cubic feet of gas annually.

The report also proposed shifting half of captive industrial power generation and gas-based industrial boilers to grid electricity or electric alternatives by 2030, improving annual energy efficiency by 1.5 percent, and reducing transmission and distribution losses to 8 percent within the same timeframe.

To encourage investment in clean energy, the report called for duty waivers on solar panels, batteries and related equipment, along with stronger payment guarantees for private investors.

“The elevated risk of fossil fuel dependence is a clear signal to swiftly expand renewable energy,” the report said.