Electricity price hiked

March 30, 2012

Effective from March 1
The government yesterday hiked electricity prices by Tk 0.28 per unit for bulk consumers and Tk 0.30 per unit for retail users with retrospective effect from March 1 this year.
As a result, power tariff for bulk clients increased by 7.49 per cent from Tk 3.74/kilowatt-hour to Tk 4.02 a unit and for retail users by 6.25 per cent from Tk 5.02 to Tk 5.32 a unit.
This is the third rise in electricity prices in the last four months.
Bangladesh Energy Regulatory Commission (BERC) Chairman Syed Yusuf Hossain announced the new prices at his Karwan Bazar office in the city.
“This hike is for fuel cost adjustment. Government subsidies for petroleum-based power plants went up following the latest rise in oil prices in the international market,” he noted.
Electricity tariff for bulk consumers rose by Tk 0.47 per unit on December 1 and by Tk 0.40 per unit on February 1.
The retail tariff soared by Tk 0.55 per unit on December 1 and Tk 0.31 on February 1.
State-run distribution entities Dhaka Power Distribution Company, Dhaka Electric Supply Company, Rural Electrification Board and West Zone Power Distribution Company are bulk buyers of the Power Development Board (PDB). Besides, there are 1.3 crore consumers in the country.
The average production cost of a unit of electricity is Tk 5.70, according to PDB.
Experts have emphasized improving the supply-side management and efficiency of power plants, instead of opting for repeated hike in power prices.
Contacted, former caretaker government adviser Akbar Ali Khan said apparently it seems the hike is not so high. “But the frequent change in prices is only creating inflationary expectations.”
“As a result, the price of commodities will go up without any corresponding substantive reason,” he observed.
The main reason for the high subsidies is that the electricity producers are not efficient. As a result their cost of production is high, pointed out Akbar.
The tariff hikes are part of the government’s move to slash its subsidies for the electricity generation.
According to official estimates, the government in the current fiscal year is set to spend Tk 20,000 crore in subsidies for the power sector.

-With The Daily Star input

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