Power prices up nearly 17pc
Consumers across Bangladesh are set to face higher electricity bills after the Bangladesh Energy Regulatory Commission (BERC) approved substantial increases in power tariffs at both wholesale and retail levels, adding to the financial strain caused by prolonged inflation.
The regulator announced the revised tariffs at a press briefing on Wednesday following an official notification issued a day earlier. The new rates will take effect from the June billing cycle.
At the retail level, the weighted average electricity tariff has been increased by 16.68 per cent, raising the average price from Tk9.11 to Tk10.63 per kilowatt-hour (kWh), an increase of Tk1.52 per unit.
Depending on consumption levels, consumers will experience tariff increases ranging between 15 per cent and 19.94 per cent.
Wholesale electricity prices have also been raised by 19.85 per cent, from Tk7 per unit to Tk8.39. In addition, transmission charges have been increased by 23.96 per cent, from approximately Tk0.31 per unit to Tk0.39.
The decision comes at a time when households are already struggling with elevated living costs, prompting concerns over its impact on consumer spending and overall inflation.
Questions have also emerged over the speed of the tariff revision process. Responding to concerns, BERC Chairman Jalal Ahmed said there had been no external pressure behind the decision and that the process was accelerated in view of preparations for the upcoming national budget.
He acknowledged that no formal economic impact assessment had been conducted before the tariff adjustment was approved, although he noted that such an assessment could still be undertaken.
Notably, the final tariff increase exceeded the recommendation of BERC’s Technical Evaluation Committee. After reviewing proposals submitted by power generation, transmission and distribution entities, the committee had recommended a lower weighted average retail increase of Tk1.25 per kWh. The regulator ultimately approved a higher adjustment.
Public hearings on the proposed tariff revisions were held on 20 and 21 May, less than two weeks before the final announcement.
The Bangladesh Power Development Board (BPDB), which purchases electricity from public and private power plants and supplies it to distribution companies at wholesale rates, had sought an increase of between Tk1.20 and Tk1.50 per unit, equivalent to roughly 17-21 per cent.
According to BPDB, the projected cost of electricity generation in fiscal year 2026-27 is around Tk1.43 lakh crore, or approximately Tk12.91 per unit.
Under the current system, the government subsidises BPDB to cover the gap between generation costs and wholesale selling prices. Distribution companies, however, do not receive such support and are expected to operate on a financially sustainable basis.
BERC’s evaluation committee estimated that the revised tariffs could reduce government electricity subsidies by up to Tk13,000 crore in the next fiscal year.
The latest increase follows a previous adjustment in February 2024, when retail electricity prices were raised by 8.5 per cent and wholesale rates by 5 per cent through an executive order.
With the new hike significantly larger than the previous revision, consumers and businesses alike are likely to face higher operating and living costs in the months ahead, while questions remain over the absence of a detailed assessment of its economic and social impact before implementation.
