Govt plans similar prices for CNG, diesel; experts argue justification; unhappy gas station owners mull strike
Having hiked CNG prices twice this year, the government now mulls a third raise by December to close the gaps between CNG and diesel prices.
“The price of CNG [compressed natural gas] is likely to increase by this year, definitely,” Finance Minister AMA Muhith told reporters at his secretariat office yesterday.
“CNG price should be close to the price of diesel,” he said, adding that general people did not benefit from CNG, as the fares for CNG-run buses are almost the same as those run by diesel.
At present, diesel sells at Tk 51 per litre and the price for CNG is Tk 30 per cubic metre.
To bridge the difference, the price of CNG could be hiked up to Tk 45 per cubic meter, energy ministry officials have said.
CNG-run and diesel-run vehicles in the capital charge the same fares although the price of CNG is Tk 21 lower than that of diesel per unit.
In May, the government increased the CNG price to Tk 25 from Tk 16.75 a cubic meter. The price was revised to Tk 30 in September.
In the same month, prices of diesel, kerosene, petrol and octane were raised by Tk 5 per litre each, with the price of furnace oil going up by Tk 8.
Even after the hike, the government subsidy for fuel stands at Tk 20,000 crore in the current fiscal year, sources in the energy ministry say.
However, Muhith’s comment on the rise has sparked criticism from CNG filling station owners, who have threatened to launch a movement including calling a strike against the move, reports UNB.
Zakir Hossain Nayan, secretary general of Bangladesh CNG Association, yesterday told the news agency that the body would meet on Saturday to discuss the next course of action.
“Most of our association members have already expressed their opinion about calling a strike to protest the statement of the finance minister,” UNB quoted him as saying.
Nayan said other stakeholders, such as transport operators, would also be affected by the proposed price rise and eventually the common people would suffer as a result of the increase in prices.
Nayan said the Energy Regulatory Commission is the legal authority to take any decision on a fixing of CNG prices, and that the finance minister cannot make any comment on the matter.
Talking to The Daily Star, Petrobangla officials said raising CNG price to the level of diesel price was illogical, as the price of CNG price was already five times higher than the price of gas for industrial consumers.
“Compared to the gas price for power and fertiliser sectors, the price of CNG is 10 times higher,” a senior expert at Petrobangla told The Daily Star, preferring anonymity.
But, more importantly, CNG is an import substitute for diesel and other petroleum products.
“Just imagine. If these CNG users switch to diesel from gas, how much additional fuel we would have to import. Our foreign currency reserve is already bleeding because of high fuel imports,” said the source.
At present, CNG stations consume 110 million cubic feet of gas every day through catering to around 2 lakh motor vehicles. The country has some 16 lakh motor cars.
Petrobangla has said the government is increasing the CNG price mainly to discourage the booming motor market. The introduction of CNG early in the last decade saw a phenomenal rise in the use of motor vehicles, as it made maintenance and transport cheaper.
Considering the worsening traffic situation, the government now wants to slow down this trend, the source added.
“But nobody should forget that the introduction of CNG has eliminated those ramshackle vehicles run by diesel from the capital almost overnight. If you remember, Dhaka’s air had become unbearable in 2001-2002. Now we can at least breathe,” he said.
“Once you start discouraging CNG, more and more vehicles will start using diesel and that won’t do any good for any of us in the cities.”
However, Muhith yesterday said the government was considering putting in place an “automated pricing system” for fuels. The new system, responding to price rises on the international market, will automatically adjust the price in the country.
The energy division has been instructed to draft a “formula” for the automatic pricing system to be placed before the cabinet, the minister added.
Muhith said fuel prices in Bangladesh were lower than in other countries, including those in the subcontinent.
-With The Daily Star input
