Currently, each cubic metre of gas costs Tk 9.36, but a BERC committee believes that prices can be hiked to Tk12.47.
The price hike was recommended in response to an earlier proposal by state-run PetroBangla to raise prices to Tk15.30.
We have analysed the gas imports data for the fiscal year 2021-22, after which we made the recommendation,” Didarul Islam, the committee chief told the Business Post.
Meanwhile, BERC Chairman Abdul Jalil said: “The BERC has been fixing the prices of electricity and gas since its inception.”
“The commission is a semi-judicial system, where prices are fixed based on logic and proof,” he added.
The proposal came on the first day of the four-day public hearing on the proposed gas tariff hike of 117 per cent at the retail level with the representatives of the gas companies on Monday.
BERC is holding the hearing to listen to the arguments from the stakeholders in the gas sector.
All the sessions of the hearing – from 10:00am to 5:00pm every day till Thursday – will be held at the BIAM Auditorium in Dhaka.
As per the gas distributors' proposals submitted back in January, the monthly gas price for a double burner will increase to Tk 2,100 from the existing Tk 975, while the price for a single burner will rise to Tk 2,000 from the current Tk 925.
Hearing on the proposals made by state-owned PetroBangla and Gas Transmission Company Limited (GTCL) were discussed on Monday.
At the beginning of the hearing, BERC Chairman Md Abdul Jalil said that the regulatory body will not make any rash decisions in this regard.
PetroBangla proposed to hike gas prices to increase its revenue allocation for purchasing gas from public and international companies as well as import LNG from abroad.
Meanwhile, the proposals made by Sundarban Gas Company and Pashchimanchal Gas Company will be heard on Tuesday, Titas Gas and Bakhrabad Gas companies on Wednesday, and Jalalabad Gas and Karnaphuli Gas companies on Thursday. After the conclusion of the hearing, the watchdog body will announce its decision within 90 days.
Official sources said PetroBangla and its seven subsidiary bodies submitted the proposals to raise gas prices at the bulk and retail levels following the directive of the Energy and Mineral Resources Division of the Ministry of Power, Energy and Mineral Resources.
For the last several months, the energy division has been under pressure from the finance ministry to collect more revenues by raising gas prices to offset subsidies in the energy sector.
A member of the BERC said PetroBangla currently imports only 5 per cent of its daily consumption from a highly volatile international spot market where it has to buy gas at higher prices.
It imports its 20 per cent gas from two international companies under long-term contracts where prices are static.
"If the local production is raised by 5 per cent, then the country will not need to import the 5 per cent gas from volatile markets at a higher price and finally it would not have to raise the gas price at the retail level," he added.
Normally, the Petrobangla supplies 2,700-3,000 million cubic feet (mmcfd) gas per day of which 2,300mmcfd is produced locally while 600mmcfd is imported as LNG.
Of this imported 600mmcfd, 150mmcfd is imported from the spot market at a variable price between $10 and $30 per unit.