Written by The Banking Post
The government is unlikely to raise electricity tariffs for at least the next two years, as it moves to shield consumers grappling with economic pressures.
Instead of increasing rates, the Ministry of Power, Energy and Mineral Resources plans to reduce system loss and eliminate inefficiencies to contain costs. Officials said discussions are underway to bring system loss down to between 2 and 5 per cent from the current 7 per cent.
Power, Energy and Mineral Resources Minister Iqbal Hasan Mahmud has directed senior officials of power-sector entities to curb irregularities and trim unnecessary expenses so that tariff hikes can be avoided. The instruction came at a meeting held at the Secretariat, as the government led by Tarique Rahman begins implementing sectoral reform plans.
No hike since early 2024
Electricity tariffs were last revised on February 29, 2024, during the previous administration. Retail tariffs were raised by around 8.5 per cent, or Tk 0.70 per kilowatt-hour on average, while bulk tariffs increased by 5 per cent, or Tk 0.34 per unit.
Currently, the average retail electricity tariff stands at Tk 8.95 per unit, while the bulk rate is Tk 7.04 per unit.
Officials noted that the interim administration over the past 18 months did not raise power tariffs.
Furnace oil price cut
In a parallel move, the Bangladesh Energy Regulatory Commission has reduced the retail price of furnace oil by Tk 15.90 per litre — an 18.48 per cent cut — bringing it down to Tk 70.10 from Tk 86, effective from Sunday midnight.
The regulator said the revision followed a public hearing and was finalised after reviewing proposals and stakeholder opinions under the relevant provisions of the BERC Act, 2003.
Industry insiders believe the lower furnace oil price will significantly reduce generation costs at oil-fired power plants, easing pressure on the overall power sector and supporting the government’s stance against tariff hikes.
The commission has also set the marketing charge for state-run oil marketing companies at Tk 0.72 per litre and the integrated transportation charge at Tk 1.20 per litre.
