The government is likely to increase the prices of CNG (compressed natural gas) early next month, a senior official of Bangladesh Energy Regula-tory Commission (BERC) said.
BERC has received such a proposal from the Petrobangla about a month ago, BERC chairman Yusuf Hossain told daily sun.
“We will announce fresh tariff to raise CNG prices in the first week of March after discussing its justification with the stakeholders on February 17,” he said.
The Petrobangla proposed to the BERC to raise CNG prices to Tk 25 from Tk 16.75 per cubic metre.
Petrobangla also suggested an increase in the price of feed gas, raw gas which is supplied to the CNG re-fuelling stations, to Tk 17.50 from Tk 9.97 per cubic metre.
The Petrobangla proposal said if CNG price is increased in line with the proposal, profit margin of the CNG stations would also increase to Tk 3.38 from Tk 2.66 per cubic metre.
As per the proposed price hike, the government will earn an additional Tk 602 crore by selling 1000 million cubic feet gas per day. Currently, the figure stands at Tk 1,675 crore.
Petrobangla hopes that CNG consumption will decrease to 200 million cubic metres from 1000 million cubic metres because of the planned increase in the CNG prices.
The existing CNG price is less than 35 percent compared to that of neighbouring India and Pakistan, the proposal added.
Petrobangla has prepared the draft proposal for CNG price hike considering the expenditures including payment of electricity and bank interest, payment of salary to staff, land rent and others to produce and transmit 500 cubic metres gas per hour to a CNG refuelling station.
The government last increased the CNG price to Tk 16.75 from Tk 8.50 per cubic metre in April, 2008. It also raised feed gas price to Tk 9.97 from Tk 2.47 the same year.
Low cost CNG prices are blamed for high growth of private cars on the streets in the capital city causing serious traffic congestion, a senior official of the Petrobangla said.
Affluent consumers have continued converting their vehicles into CNG because of low CNG prices, he added.
“I hoped that the traffic congestion would reduce significantly after the proposed hike in CNG prices.” Eng Shafiul Azam, managing director of Rupantarita Prakritik Gas Company Ltd (RPGCL), a subsidiary company of Petrobangla, told daily sun that CNG price must be increased to minimise the price gap with other petroleum fuels.
Currently, CNG is selling 85 percent lower than other petroleum fuels.
The move also might increase consumption of the petroleum fuels, Eng Shafiul Azam said.
There are a total of 584 CNG stations across the country, RPGCL sources said.
The CNG stations consume nearly 100 million cubic feet of gas per day (MMCFD) across the country, of which nearly 70mmcfd is consumed by CNG stations in the capital city and its suburbs.
A total of 296 CNG stations have been installed in the city and its adjoining areas, which resulted in severe gas crisis in residential areas.
There are two lakh CNG-converted vehicles in the country. Of them, the number of cars, jeep and micro-buses stands at nearly 1.25 lakh. Besides, about 26,000 auto rickshaws, 12,000 taxi cabs and 10,000 buses have also been converted into CNG creating additional pressure on the country’s existing gas supply.
According to the zoning principle of Energy and Mineral Resources Division (EMrD) on installation of CNG stations, no CNG station will be allowed to be set up in certain areas such as Jatrabari to Meghnagat intersection, Comilla bypass areas, Chaudda-gram, Feni and Sitakund areas, Kanchpur Bridge to Bhairab Bridge, Bhairab-Brahmanbaria highway-Sarail Road area, Tongi-Joydevpur Cantonment intersection, Sripur to Mymensingh city intersection, Aminbazar Bridge to Savar bridge, Dhamrai Bridge to Paturia intersection, Nabinagar to Chandra intersection, Kaliakoir-Tangail bypass to Elenga and Sirajganj-Pabna road in view of the supply crisis.
But the EMRD zoning principle is not applicable to Dhaka and Chittagong cities