The government has raised the price of gas for all sorts of power plants by Tk 0.75 per unit, effective from the ongoing month of February.

The Energy and Mineral Resources Division announced the new prices of gas for power production on Tuesday ahead of a planned hike in electricity tariff.

As per the new rates, government’s gas-based power stations, independent power producers and rental plants will have to pay Tk 14.75 per unit of gas.

For captive power plants, small power plants and commercial power stations, gas price will be Tk 30.75 per unit.

Gas prices have been kept unchanged for fertiliser plants at Tk 16 per unit, industrial connections Tk 30 per unit, tea estates Tk 11.93, hotels and restaurants Tk 30.5, CNG refuelling stations Tk 35, and households Tk 18.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid has been speaking about raising energy prices to cut subsidies further for quite some time.

The steps to reduce subsidies have now started with the rise in gas prices for power production.

MINISTRY HOPES TO CUT SUBSIDIES BY TK 5BN

The power, energy and mineral resources ministry said in a statement clarifying the reasons behind the 2.5 percent-5.36 percent gas price hike for power production will help the government cut subsidies for the sector by Tk 5 billion this year.

The difference between the price of natural gas and the cost of producing, importing and supplying it will force the government to provide the sector with more than Tk 65 billion in subsidies in the 2023-24 fiscal year.

After the adjustment of the price, the ministry hopes it will be able to keep the subsidies for the sector, considering the current price of liquified natural gas and the exchange rate of the dollar, within Tk 60 billion.

Among the eight types of gas customers in Bangladesh, power producers use 37 percent, captive power 18 percent, industries 23 percent, households 10 percent, fertiliser plants 7 percent, CNG refuelling 4 percent, and commercial customers and tea estates 1 percent.