The High Court (HC) has extended its directive to maintain the status quo on the internal affairs of mobile financial service provider Nagad until 30 January.

An HC bench comprising Justice Farah Mahbub and Justice Debasish Roy Chowdhury passed the order on Thursday (16 January).

The court issued this ruling after a director of Nagad filed a writ petition contesting Bangladesh Bank’s appointment of an administrator to the company on 21 August last year.

Barrister Muhammad Nawaz Jamir, representing Nagad, stated, "The honourable High Court has issued an order maintaining the status quo on administrative activities concerning Nagad."

He added that this order prevents any new decisions from being executed until the final judgment.

The lawyer further noted that the court criticised Bangladesh Bank for several alleged illegal actions, suggesting that these would be rectified upon the delivery of the final verdict.

Interim government had directed the appointment of an administrator to investigate purported irregularities within the mobile financial service provider.

The court initially issued a rule nisi to the government and the banking regulator, questioning the appointment.

On 18 December, the High Court directed the authorities to maintain the status quo on Nagad's internal affairs until 2 January, subsequently extending it to 30 January with the recent order.

Bangladesh Bank officials clarified that the High Court's directive pertains solely to the activities of the administrators at Nagad, leaving the company's mobile financial services unaffected.

The central bank also announced the appointment of a forensic auditor, affirming that the High Court order does not impede the forensic audit process.

Applications from interested audit firms were invited on 16 January.

Finance Adviser Dr. Salehuddin Ahmed said that the proposed VAT on several products, including medicines and clothing, is being reconsidered.

He said this while talking to reporters after the meeting of the Advisory Council Committee on Government Procurement at the Secretariat on Thursday (January 16).

Previously, Barrister Md. Badruzzaman Munshi, Second Secretary of the VAT Law and Rules Division of the National Board of Revenue (NBR), said that there is a plan to reduce VAT on some products, but no decision has been made yet. Once a decision is made, it will be announced.

He also said that on January 9, an ordinance was issued to increase VAT in the hotel and restaurant sector to 15 percent. However, it is being rolled back to the previous rate. That is, VAT in the hotel and restaurant sector will remain at 5 percent. The National Board of Revenue will issue an order in this regard today.

Multinational company Chevron Bangladesh has written to pay at least 75 million dollars as soon as possible due to outstanding gas bills, which are hampering development activities.

Ministry sources confirmed that a letter signed by the company's Managing Director and President Eric M. Walker was submitted to the office of the Secretary of the Energy and Mineral Resources Department on Thursday (January 9). The letter sought the Secretary's intervention in paying the outstanding bills.

When asked about the amount of outstanding gas bills, Chevron Bangladesh's Manager (Media and Communication) Sheikh Zahidur Rahman told Barta24.com that he cannot comment on any financial issue due to company policy. He also did not comment on whether he had given the letter to the media.

Regarding the amount of Chevron Bangladesh's outstanding gas bills, Petrobangla Director (Finance) AKM Mizanur Rahman told Barta24.com that the company will probably receive a bill of around 150 million dollars. In response to another question, he said that the amount of gas and condensate it is currently supplying, the company's monthly bill is around 40 million dollars.

The multinational company Chevron Bangladesh's arrears have been in the news for a long time. Bangladesh has sometimes waived some money. Still, the company's gas bills for several months are still outstanding. Last December, Chevron International Exploration and Production Vice President Frank Casullo visited Bangladesh. During that visit, he met with Chief Adviser Dr. Muhammad Yunus in Dhaka. Sources said that the arrears issue was also discussed in that meeting.

Incidentally, Chevron is one of the world's leading integrated energy companies. They have a presence in almost every field of the energy sector. The company has been extracting gas in Block-12, 13 and 14 areas of Bangladesh. It is the largest producer of natural gas in Bangladesh, accounting for about 60 percent of the total domestic natural gas production and 83 percent of domestic condensate production. The largest of these is the Bibiana gas field. On January 13, the gas field supplied 977.5 million cubic feet of gas. At one time, the gas field produced over 1,300 million cubic feet, but production is decreasing due to declining reserves. At one time, domestic gas fields produced about 2,800 million cubic feet of gas daily, but only 1,939 million cubic feet of gas was obtained on January 13. Production is constantly decreasing due to declining reserves.

On the other hand, LNG imports were started in 2018 to meet the increasing demand. LNG prices have skyrocketed since the Ukraine war. Along with the high price, the dollar price has also increased, so Petrobangla has lost its rhythm. It is not able to cope despite increasing prices in stages. A proposal to increase the price from Tk. 30 and Tk. 31.75 taka to Tk. 75.72 in new industries and captives, respectively, is under process.

Petrobangla sources said that the average price of gas obtained from domestic sources is around 6.07 taka. In addition, after importing around 800 million cm, the average price stood at 19.09 taka in the 2022-23 fiscal year, while the average selling price was 11.91 taka, and in the 2023-24 fiscal year, after importing 400 million cm, the average price stood at 23.85 taka. In that year, the average selling price was 22.87 taka, with a loss of 98 paisa per cubic meter. In the last 6 fiscal years, the deficit has been about 28 thousand crore taka.

Sources further said that just as Petrobangla owes money to various organizations. Similarly, Petrobangla's arrears to various organizations, including the power sector, have exceeded Tk. 28 thousand crore. Meghna Group has a gas bill of about Tk. 800 crore.

It is worth noting that, along with Chevron, the Qatari government has also urged the government to pay the arrears. 40 cargoes of LNG are imported from Qatar annually on a G2G basis. It is known that about 150 million dollars is currently owed.

Dhaka: Titas Gas Transmission and Distribution Company wants to increase gas bills for residential customers without meters as well. The company's Managing Director Shahnewaz Parvez said that this issue is in line with the proposal to increase gas prices for new industries and captives.

He told Barta24.com that residential customers without meters are using a lot more gas. A bill of 55 cubic meters for a single stove and 60 cubic meters for two stoves are being collected. But in some cases, there are records of gas usage of up to 100 cubic meters.

In response to a question, he said that there is a lot of difference between the usage of prepaid meter users and non-metered customers. Customers using prepaid meters are very frugal. Therefore, their usage is much less. In areas where prepaid meters are available, they often go to hotels and restaurants to eat. It is not possible to compare them.

On January 6, Petrobangla proposed to increase the price of gas supplied to new industrial boilers and industrial generators (captive) from Tk. 30 and Tk. 31.75 respectively, while keeping the prices of existing customers unchanged. Legally, Petrobangla's price increase proposal is not eligible to be considered. Only licensees can propose a price increase. Therefore, BERC (Bangladesh Energy Regulatory Commission) has asked the distribution companies to propose price adjustments. In a letter issued on January 7, the distribution companies have been asked to submit a proposal for tariff changes to the commission within 3 working days.

Residential customers without meters are charged a fixed amount of gas. Whether the customer uses it, does not use it, or uses more, he has to pay the fixed bill. BERC last ordered a gas price increase on June 5, 2022. Before that order, a public hearing was held. At that time, the statistics of customers using prepaid meters of the distribution companies showed that on average one stove was using 40 cubic meters and two stoves were using a maximum of 50 cubic meters. Based on the usage statistics of prepaid customers, one stove was reduced from 73.41 cubic meters and two stoves from 77.41 cubic meters to 55 and 60 cubic meters respectively.

10 months after the BERC order, Titas Gas applied to increase the existing one stove from 55 cubic meters (Tk. 990) to 76.65 cubic meters and two stoves from 60 cubic meters (Tk. 1080) to 88.44 cubic meters. And if the quantity increases, the price will naturally increase. Titas said in its application that BERC has determined the amount of cubic meters without any survey or data analysis against approximately 2.5 million customers without meters. This has increased technical losses and Titas, a government-owned for-profit organization, is facing financial losses.

BERC's then member (Gas 2022) Maqbul E-Elahi Chowdhury told Barta24.com, Titas Gas's allegations are not true. I think they should have been below 50 cubic meters. Of the 350,000 prepaid meters they had, less than 45 cubic meters were used on average. This can be understood by looking at the prepaid meter bill information. You don't need to know rocket science for this matter.

BERC has been holding Titas' application for a long time. The commission had formed a committee, but the report of that committee has not yet seen the light of day. BERC is also considering taking up the proposal of unmetered residential customers in the public hearing, a source has confirmed.

On the other hand, distribution companies are embarrassed by the proposal for an unusual price increase. None of them sees the logic of increasing prices by 152 percent for industrial and captive customers. Top officials of several companies, on condition of anonymity, said that Petrobangla is trying to increase prices by putting a gun to our shoulders. Consumers will have to face us in the public hearing. However, we do not agree with this price increase at all. As far as we know, a new price formula has been prepared as per the ministry's request. We are having to propose to increase the price despite our reluctance.

Some companies are trying to use this as an opportunity. It is known that many, including Sundarban Company, are going to propose to increase the distribution charge. An official of Sundarban Gas Company Limited said on condition of anonymity, "Our existing wheeling charge is 24 paisa, which is causing us losses. We can propose to set the distribution charge at 32 or 34 paisa."

Gas is purchased from the state-owned Sylhet Gas Field Company Limited at a rate of 1 taka, from Bangladesh Gas Field Company at a rate of 1.25 taka, and from Bapex at a rate of 4 taka per cubic foot. Then, the average price of gas purchased from multinational companies Chevron Bangladesh and Tallo stands at 6.07 taka per cubic meter.

In Petrobangla's price increase proposal, it was said that the current import price of LNG per cubic meter is Tk. 65.70. Adding VAT, tax and other charges, it stands at Tk. 75.72. As a result, the gas price gap will have to be reduced to sustain this sector. If LNG is imported as planned, Petrobangla will have a deficit of about Tk. 16,161.71 crore in the current fiscal year.

Business leaders and organizations have reacted strongly to this process of increasing gas prices. They have demanded an immediate stop to the process of increasing gas prices. They believe that industrialization will be stopped if the proposal is approved.

BERC has formed a technical committee to scrutinize the proposal to increase the price of Petrobangla gas. After receiving the report of the technical committee as per the rules, an order was given for a public hearing.