In a recent development, the government has officially declared a 5% increase in the power tariff for bulk consumers, raising it from the existing Tk6.70 per unit to Tk7.04. This translates to a rise of Tk0.34 per unit (each kilowatt hour), with the revised rates taking effect from February 1.
The announcement came through a gazette notification issued on Thursday evening. Primarily affecting distribution entities and large industries receiving electricity at 33 kV, 132 kV, and 230 kV transmission lines directly from the Bangladesh Power Development Board (BPDB), the adjustment aims to address financial challenges in the power sector.
According to a top official from the BPDB, the new tariff will not impact retail consumers until a separate announcement is made for them. The distribution entities, including BREB, DPDC, Desco, Nesco, WZPDCL, and BPDB itself, will purchase electricity from BPDB at Tk8.44 per unit at 230 kV, Tk8.47 at 132 kV, and Tk7.62 at 33 kV level, as per the gazette notification.
Simultaneously, a separate gazette notification has been issued, increasing the transmission charge for these entities.
Earlier statements from State Minister for Power, Energy, and Mineral Resources Nasrul Hamid had initially indicated a tariff hike from March 1. However, the revised rates are now set to be retroactively applied from February 1, covering the billing cycle for the month.
In addition to the tariff adjustment, Minister Hamid outlined plans for dynamic fuel pricing starting March 1, linking petroleum fuel prices to international market fluctuations. This move is expected to impact consumers monthly, with fuel prices declared regularly, similar to practices in neighboring India.
The minister highlighted the need for these measures to address the government’s substantial losses, amounting to Tk43,000 crore this year due to the lower electricity selling price. The tariff increase is part of the government’s strategy to phase out subsidies in the power sector.
BPDB’s Annual Report for 2022-23 sheds light on the fiscal challenges faced by the power sector, revealing a production cost of Tk11.33 per unit and a selling price of Tk6.70 per unit, resulting in a significant loss of Tk4.63 per unit. The imbalance led to a staggering loss of Tk47,788 crore for the fiscal year, prompting the government to grapple with higher rates from private and international sources.
To cope with this financial strain, the government has had to purchase electricity worth Tk82,778 crore from private sector producers, while generating only Tk13,307 crore from its own plants. The report also details the varying production costs, emphasizing the economic challenges the government seeks to address through tariff adjustments.
