The Bangladesh Energy Regulatory Commission (BERC) has hiked bulk electricity price by 19.92% to Tk6.20 kWh from the previous price of Tk5.17 kWh.
The new tariff will be implemented from next month (December), BERC Chairman Md Abdul Jalil said while virtually announcing the price on Monday (21 November).
Md Abdul Jalil also said that retail electricity prices will remain the same until a new rate is fixed by BERC after hearing proposals from distribution companies.
Distribution companies previously urged for increasing electricity prices at the consumer level hearing the news of bulk prices going up, but no proposal has been filed yet.
Economists fear the move will cause more misery in the lives of people who are already under severe strain due to increasing prices of goods.
Sources say, one of the International Monetary Fund (IMF) conditions for loan is to reduce subsidies in the power and energy sectors and the price hike is coming as part of that process, although the BERC rejected the move just 38 days ago.
The IMF delegation that visited Dhaka held a meeting with PDB and Power Division on 2 November and the BERC on 6 November. The meetings discussed electricity prices, subsidies and PDB's losses.
On 12 January, the Power Development Board (PDB) proposed a hike in bulk electricity prices. The company asked for a price hike of around 66%. A public hearing on their proposal was held on 18 May.
BERC's technical committee at the hearing recommended a 58% price hike. After nearly 5 months, in an announcement on 13 October, the BERC said, considering the overall situation and as the PDB failed to show any rational reason, the application was rejected.
However, PDB resubmitted the proposal on 13 November along with necessary explanations and information about the topics which were previously unclear, said BERC Member (Electricity) Bazlur Rahman.
He also said that the bulk price is being increased but not at the rate PDB proposed.
BERC last increased the wholesale price of electricity by 8.39% to Tk5.17 per unit in February 2020. Currently, PDB is spending Tk14-15 for the generation of each unit of electricity. So, day by day the losses of the company are increasing.
According to PDB, they incurred a loss of Tk11,509 crore in the financial year 2020-21. In the financial year 2021-22, the loss exceeded Tk31,000 crore. In the current financial year (2022-23), the company believes that the amount of loss may exceed Tk50,000 crore.