Muhammad Tareq ; Dhaka: The Bangladesh Energy Regulatory Commission (BERC) is preparing to announce a new hike in electricity tariffs immediately after the Eid holidays. The Power Division aims to make the new rates effective from June 1, and concerned officials are working rapidly to finalize the process.
This development follows public hearings held on May 20 and 21 regarding the price hike proposals. According to sources close to the matter, price increases at both wholesale and retail levels are almost certain. Wholesale prices may increase by up to 15%, while retail prices could witness an 8% to 16% jump.
The Power Development Board (PDB) initially proposed a wholesale price hike of Tk 1.20 to Tk 1.50 per unit (a 21% to 29% increase). However, sources indicate the final increase is likely to be capped around 15%.
According to PDB’s projections, the estimated power production cost for the 2026-27 fiscal year is projected at Tk 143,108 crore, bringing the average production cost per unit to Tk 12.91. If electricity continues to be sold at the current wholesale rate, the total revenue generated will only reach Tk 77,553 crore. PDB notes that a Tk 1.20 per unit hike would cut the deficit by Tk 1,329 crore, while a Tk 1.50 increase would reduce it by Tk 1,666 crore.
Citing massive losses at the wholesale level, distribution companies have also applied for retail price hikes. Dhaka Electricity Supply Company Limited (DESCO) has proposed a 9.67% increase, Dhaka Power Distribution Company (DPDC) 6.96%, West Zone Power Distribution Company (WZPDCO) 10%, and the Bangladesh Rural Electrification Board (BREB/REB) 5.93%.
On the other hand, Northern Electricity Supply Company (NESCO) requested an increase of 3 paisa per unit, and PDB asked for 29 paisa at the retail level. If wholesale prices go up, retail consumers could face an 8% to 16% hike.
When asked about the situation, BERC Chairman Jalal Ahmed stated that the order regarding the price hike will be issued soon. “We cannot specify an exact date yet.
Work on determining the price is currently underway, and it is not possible to provide specific figures right now,” he said. However, multiple insiders confirmed that efforts are in full swing to enforce the new rates by June 1.
Proposed Rise in Transmission Charges
Power Grid Bangladesh PLC, the country’s sole transmission company, has applied to increase electricity transmission charges from the current 30 and 31 paisa per unit to 48 and 49 paisa. However, a BERC technical committee has recommended setting the charge at 44 paisa.
Rising Production Costs
According to PDB data, the production cost of electricity reached around Tk 8.50 per unit in 2022. Currently, the average production cost is claimed to be nearly Tk 13.
Officials attribute this surge to the rising dollar rate and skyrocketing fuel prices in the international market. However, energy experts have long argued that irregularities, corruption, unfavorable contracts, and mismanagement are heavily responsible for the inflating costs in the power sector.
The last electricity price hike was implemented via an executive order on February 29, 2024, which raised the average wholesale price from Tk 6.70 to Tk 7.04 per unit.
Strong Opposition at the Hearings
Political leaders, consumer rights activists, business leaders, and industrial entrepreneurs strongly opposed the price hike proposals during the public hearings held in Dhaka on May 20-21. Opponents alleged that the general public is being forced to shoulder the burden of long-standing corruption, mismanagement, poor planning, and systemic waste in the power sector.
Dr. Syed Mizanur Rahman, Organizing Secretary of the Consumers Association of Bangladesh (CAB), remarked that the government and power sector utilities repeatedly use the pressure of subsidies as an excuse to raise prices. However, they fail to consider the impact on the public’s cost of living, household struggles, or the ongoing high inflation.
Ruhin Hossain Prince, former General Secretary of the Communist Party of Bangladesh, added that the industrial and export sectors are already under immense pressure. Raising electricity and energy prices further will drive up production costs, ultimately damaging Bangladesh’s competitiveness in the international market.
A leader from BKMEA also warned that higher gas and power tariffs would push industrial factories into a deeper crisis.