Retail power tariff hiked by 19 paisa per unit

The government has raised the electricity tariff by 19 paisa per unit (each kilowatt hour) at the retail level, which is 5 percent higher than the existing tariff, effective from January 1, 2023.

The existing average retail tariff is Tk7.13 per unit. The monthly demand charge was also raised for different types of consumers.

The tariff was raised through an administrative order, issued by a gazette notification on Thursday evening, reports UNB.

The decision to raise the power tariff at the retail level was taken under the new amendment to the BERC Act which empowered the government to take any decision in this regard bypassing the regulator's jurisdiction.

However, nothing was mentioned in the Power Division’s 19-page gazette notification about the average hike in tariff or how much of the tariff was raised in percentage.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid clarified it saying that the electricity tariff was raised by 19 paisa per unit at retail level, 5 percent up from the existing tariff. He also said the tariff will be adjusted every month from now on.

"We had to raise the tariff to cover about 20 per cent hike in bulk level while the government subsidy was also taken into consideration", he told UNB.

This fiscal year the government has to provide Tk 28,000 crore as subsidy, while such subsidy was Tk 17,000 crore in the last fiscal, he noted.

Justifying the 5 percent hike in retail tariff, the state minister said that the government had to go for upward tariff adjustment because of the growing energy prices globally.

"The coal price has gone up to $250 per metric tons which was only $90 per MT last year", he said.

Earlier, the BERC raised about 19.92% bulk power tariff on November 21 with effect from December 1.

Subsequently, six power distribution entities submitted their respective proposals to the BERC seeing a similar 19.44% hike in retail power tariff at consumer level.

But within a week, the Cabinet on November 28 approved an amendment to the BERC Ordinance 2022 to empower the government to set fuel tariff on its own under special circumstances without waiting for the commission's public hearing and decision.

Earlier, during a public hearing the technical evaluation committee (TEC) of BERC recommended raising the weighted average tariff of electricity by 15.43 percent at the retail level against the demand of the distribution companies for hiking it by about 20 percent.

The committee suggested setting the weighted average retail tariff at Tk8.23 against the existing Tk7.13 per unit (each kilowatt hour) with a hike of Tk 1.10 per unit.

Consumers Association of Bangladesh (CAB) vice president Prof M Shamsul Alam termed the government's raising of power tariff by administrative order as a bad example which will encourage corruption and irregularities in the power sector.

This move will be detrimental to the accountability and transparency which is being established by the BERC's public hearing, he said.