B Mirror Report: The government has moved to increase electricity prices. On Monday, the Power Division submitted a proposal to the Bangladesh Energy Regulatory Commission (BERC) to raise tariffs at both wholesale and retail levels. According to the proposal, wholesale electricity prices could increase by Tk 1.20 to Tk 1.50 per unit, while retail prices may rise by up to Tk 1.38 per unit.
Under the plan, tariffs for general consumers will be adjusted based on usage levels. However, lifeline consumers those with low electricity usage will be exempted from the price hike.
As per standard procedure, electricity distribution companies submit their own proposals to the commission. The Bangladesh Power Development Board (BPDB) and other distribution companies have already begun preparing their submissions in line with the Power Division’s proposal, which may be sent to BERC within the current week. BERC Chairman Jalal Ahmed said the proposals will be reviewed in accordance with the law once received.
BPDB Chairman Rezaul Karim also confirmed that they are finalizing their proposal. The commission will then hold public hearings as required before announcing the revised tariffs. Sources indicate that, if all goes as planned, the new rates could take effect in early June.
The Power Division said the move is aimed at addressing rising fuel import costs, the significant gap between production costs and retail prices, and the growing burden of subsidies. Earlier, the government formed a high-level cabinet committee led by the finance minister to manage increasing expenditures in the power and energy sectors, and the proposal was made based on its recommendations.
According to the proposal, consumers using more than 400 units per month could see an increase of up to Tk 1.38 per unit, while those consuming between 76 and 400 units may face a hike of around Tk 0.70 per unit. However, consumers using up to 70 units classified as lifeline users are likely to remain exempt from the increase for now.
Currently, there are about 49.7 million electricity consumers in the country. Of them, around 37 percent may be directly affected by the price hike, while the remaining 63 percent mostly low-usage consumers’ may be relatively protected. However, analysts warn that higher electricity costs in industrial and commercial sectors could eventually push up the prices of goods and services. They note that while the proposed increase may help reduce subsidy pressure, it could raise production costs and add to the cost of living.
At present, the average cost of electricity generation is about Tk 5.50 per unit higher than the price charged to consumers, increasing reliance on subsidies. In the current fiscal year 2025–26, BPDB’s projected deficit may reach around Tk 56,475 crore. Due to high global fuel prices, an additional subsidy requirement of about Tk 15,000 crore may arise. The government has already allocated Tk 36,000 crore in subsidies for the sector.
A significant portion of the LNG, coal, and oil used in power generation is imported, and rising global prices have driven up production costs. Additionally, capacity payments must be made under contractual obligations even when many power plants are not operating at full capacity. Projects such as Meghnaghat, the RPCL-Norinco coal-based plant, and the 800 MW Rupsha plant are further adding to the financial pressure.
Most recently, in February 2024, retail electricity tariffs were increased by an average of 8.50 percent, raising the average price to Tk 8.95 per unit. At the same time, wholesale tariffs were increased by 5.07 percent to Tk 7.04 per unit.
