A year after the last increase the Government of Bangladesh is planning to hike energy tariffs in response to the pressure of the Taka’s depreciation against the dollar.
Nasrul Hamid, the State Minister for Power, Energy, and Mineral Resources, has alluded to a “slight” increase in tariffs of up to 4 per cent for both bulk and retail purchases.
The final increase in power prices was 5 per cent in March 2023 due to regular adjustments. Following that increase, the weighted average price of electricity was Taka 8.24 per unit.
Recently, officials from the Ministry of Power sat in preparation for another raise. At the meeting, an increase proposition was made.
In response to a question on how to increase the power tariff, Nasrul stated that the Government would have to do so because its strategy to reduce production costs by burning less expensive fuel coal was unsuccessful due to an increase in the dollar’s value.
“As a result, the cost of power production has increased. Now we are forced to raise the prices slightly,” he stated.
When the government allowed many coal-fired power projects, the dollar was worth Taka 75. The current value of a dollar is between Taka 110 and Taka 115. The price of coal is likewise erratic.
According to Nasrul, lifeline users won’t be impacted by a power price increase at the government-planned amount.
“We will finalise the decision in such a way that its effects will be limited within the customers who use power the most,” he added.
