By executive order, the wholesale electricity price, average rate, has been increased by 5 percent from Tk. 6.70 to Tk. 7.04. The gazette was published on Thursday evening (February 29).
The new rates will be effective from the billing month of February. According to the gazette, Rural Electrification Boards can determine different rates depending on their association. However, the weighted average cannot exceed the rate fixed by the government.
Cross-subsidies were once given to boost loss-making Rural Electricity Societies (RES). It is customary for profit-making societies to adjust wholesale electricity prices by charging comparatively higher prices.
The gazette fixed the uniform tariff of 6 distribution companies at 230 and 132 KV at Tk. 8.4440 and Tk. 8.4735 respectively. However, different rates have been fixed in 33 KV. The Rural Electrification Board rate has been reduced to Tk. 6.2325 as the lowest. Dhaka Electric Supply Company (DESCO) rate is the highest at 33 KV. The price per unit of the company has been fixed at Tk. 8.5880.
The wholesale rate has been increased by 5 percent from Tk. 6.70 to Tk. 7.04. This will reduce the amount of subsidy by Tk. 3 thousand crore. Bangladesh Power Development Board (BPDB) estimates that about Tk. 36363 crore subsidy will have to be paid even after the price increase.
In the afternoon, Minister of State for Electricity, Energy and Mineral Resources Nasrul Hamid said that the biggest problem has been due to the increase in the dollar rate. Although the international market price of oil-gas and coal remains the same, it is costing Tk. 40 per dollar more than before. This is where the huge gap is created. We are working to coordinate with the dollar. Now the average production cost of electricity is around Tk. 12 and it is being sold at Tk. 7. We have estimated that Tk. 43000 crore will be given as subsidy for electricity this year. Adjustments will be made gradually over several years. Electricity prices for low-consumption customers will increase less and higher on the upside.
Apart from this, it is known that the process of increasing the prices at the customer level is at the final stage. State Minister Nasrul Hamid said, we are not increasing the price, we are coordinating. If he made a profit, he could have raised the price. Adjustments are being made to reduce losses somewhat. The price of electricity at the consumer level will increase from 34 paisa to a maximum rate of 70 paisa.