During the tenure of the previous government, unjustified and irrational cost increases in various segments of energy supply chain continued for more than 15 years, leading to a persistent financial deficit in this sector. The Bangladesh Energy Regulatory Commission (BERC) made adjustments by increasing subsidies and tariffs. As a result, BERC lost its independence and neutrality as a regulatory body, depriving consumers of fair energy access and violating their rights.

Under the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010, investments in the power and energy sector continued without competition, further facilitating the predatory cost in energy supply increases. In 2023, an amendment (Section 34A) added to Section 34 of the Bangladesh Energy Regulatory Commission Act, 2003 transferred the authority to set all energy tariffs to the Ministry of Power, Energy, and Mineral Resources. Additionally, the following clause was inserted, "Until regulations are formulated by the Commission, the government may determine, revise, or adjust tariffs through a notification in the official Gazette."

Subsequently, the ministry frequently raised energy tariffs and adjusted the predatory costs, making the cost of living unbearable the consumers and pushing the country's energy security into a severe crisis. As a result, people's fundamental rights were threatened. No significant improvement has been made to the situation yet.

Although BERC was established in 2003 as an independent regulatory body to ensure transparency in energy management, pricing, and consumer interest protection, it totally failed to exercise its power and authority. According to Section 22 of the law, BERC had the power to: i) determine efficiency and standard of the machinery and appliances of the institutions, using energy and to ensure through energy audit the verification, monitoring, analysis of the energy and the economy use and enhancement of the efficiency of the use of energy; ii) approve schemes on the basis of overall programme of the licensee and to make decision in this regard taking into consideration the load forecast and financial status; iii) extend cooperation and advice to the government, if necessary, regarding electricity generation, transmission, marketing, supply distribution, and storage of energy; iv) resolve disputes between licensees, and between licensees and consumers, and refer those to arbitration if necessary; and v) ensure appropriate remedy for consumer disputes, dishonest business practices or monopoly.

But BERC, acting as a subservient entity of the government, has only been involved in tariff determination over the past 15 years. It has refrained from engaging in the activities outlined in Section 22, meaning it has remained inactive. It has also been inactive in exercising its powers. There has been no change in this situation till date.

Furthermore, the key considerations under Section 34 of the applicable law for determining energy tariffs are: i) harmonising the tariff with the costs of production, transmission, marketing, distribution, supply, and storage of energy; ii) efficiency, least cost, excellent service, excellent investment; iii) consumers' interest; iv) the commission shall determine tariff after giving hearing to licensees and others who have interest in it; and v) tariff determined by the commission shall not be revised more than once in a fiscal year, unless there is change in the prices of energy including any other changes.

Over the past 15 years, if the aforementioned considerations had been taken into account in tariff determination, the financial deficit in the energy sector could have been controlled. The need to frequently increase energy prices each year to manage subsidies would not have arisen, and there would have been no need to amend Subsection 34(5) of the law. The existing annual deficit in gas would not have reached Tk 20,000 crore, and Tk 42,000 crore in electricity. Gas prices would not have even risen to Tk 30 per unit. If the current BERC had properly considered these factors instead of following its predecessors, it would not need to consider the proposal to raise the gas price from Tk 30 to Tk 75.

It is regrettable that, even after the July uprising and the change of government, no improvement has been made in this sector. Neither the ministry nor BERC has introduced any qualitative improvement. After the fall of the Awami League government, the interim government repealed Section 34A, which was specially added to the BERC Act. However, the sentence in the law stating, "…until the Commission formulates regulations, the government may determine, revise, or adjust tariffs through a notification in the government gazette," was not repealed. As a result, the ministry has continued to determine the pricing of liquid fuel.

Furthermore, although the Special Provision Act, 2010 was repealed through an ordinance, Sections 2(b) and 2(c) were added to legally protect the injustices and criminal activities that were carried out under the repealed law. This deceived the public and reinforced the same predatory practices, proving that neither the government nor BERC has changed its stance.
The proposals by the Consumers Association of Bangladesh (CAB) for energy and electricity sector reforms, aimed at bringing down energy prices to a fair and reasonable level, have not been accepted. BERC has taken no initiatives to reduce predatory costs and tariffs. It has not provided any recommendations to the government either.

Instead, BERC's recently issued public notice reveals that a hearing has been scheduled for February 26, 2025, regarding the proposed increase in gas prices for industrial and captive power consumers under the proposal of Petrobangla and various gas distribution companies like Titas, Bakhrabad, Jalalabad, Pashchimanchal, Sundarban, and Karnaphuli. This indicates an impending increase in gas prices, with electricity prices likely to follow.

Reports indicate that the current financial deficit in the gas sector is around Tk 20,000 crore per year, and there is a proposal to increase the price of gas used in industrial and captive power generation from Tk 30 to Tk 75. This proposal is in conflict with Sections 22 and 34 of the BERC Act, as well as the ideals of the July uprising.

In light of this, CAB, on behalf of consumers, urgently requested BERC in a letter dated February 13, 2025 to suspend the scheduled hearing and any subsequent actions regarding the proposed gas price hike until the following proposals are adopted and implemented: i) BERC must determine the total amount of unjust, irrational, predatory costs that have been adjusted in the supply of electricity, liquid fuel, coal, natural gas, LNG, LPG, solar and wind power from 2010 to 2024 under the previous government; ii) BERC must assess how much the cost of electricity and primary energy, as well as subsidies, can be reduced by eliminating predatory costs and profits while reducing government revenue; iii) a tribunal must be formed under the BERC Act, led by a retired Supreme Court judge, to prosecute energy criminals; and (iv) to ensure energy justice and protect energy rights, the BERC Act, 2003 must be reformed by a committee comprising stakeholder representatives.

Reduce the prices of oil, gas, and electricity; bring relief to the people.

M Shamsul Alam is energy adviser at the Consumers Association of Bangladesh (CAB), and professor of electrical and electronic engineering at Daffodil University.

Views expressed in this article are the author's own.

Follow The Daily Star Opinion on Facebook for the latest opinions, commentaries and analyses by experts and professionals. To contribute your article or letter to The Daily Star Opinion, see our guidelines for submission.