Inflation in the country decreased in December. Food inflation, which is the most stressful for the common people, has seen a downward trend. Food inflation was 12.92 percent in December. And overall inflation has decreased by 10.89 percent. However, the fact that these two inflation rates are still in the double digits means that people with fixed incomes are struggling to make both ends meet.

The Bangladesh Bureau of Statistics (BBS) released inflation data for the last month of 2024 and said that the one-year moving average inflation from January to December last year was 10.34 percent. In the previous year, i.e. 2023, this rate was 9.48.

Meanwhile, overall non-food inflation was 9.39 percent in November, but it decreased to 9.26 percent in December.

In addition, overall inflation in rural areas decreased by 0.44 percent to 11.09 percent in December. Of this, food inflation was 12.63 percent and non-food inflation was 9.65 percent.

And overall inflation in urban areas decreased by 0.53 percent to 10.84 percent. Of this, food inflation was 13.56 percent and non-food inflation was 9.17 percent. 

The ministry has given in-principle approval to double the gas prices for new connections of industries and captives. The Energy and Mineral Resources Division wants to charge the cost of imported LNG without fixing the price. Even if it wants to increase the load in old industries, it will have to calculate double the price.

If the price increases in the international market, the price will increase, and if it decreases, it will decrease. Two types of prices have been proposed. One price for approved (promised) but not connected customers, and a different price for new industries has been proposed. Half of the gas price for promised customers will be equal to the existing price, and the import price for the other half. Currently, the price of gas used in industries is Tk. 30, and Tk. 30.75 for captives.

Bangladesh has been importing LNG under the long-term contract (G2G) and from the sport market (through open tender). Strict confidentiality is maintained in the G2G contract, which is why the price is not disclosed. However, according to the Spot Market agreement last August, the price per cubic meter has fallen to Tk. 71.

If the proposed formula is approved, the promised customer may pay about Tk. 60 per cubic meter for half of the gas he uses. The existing rate for half will be paid at the rate of Tk. 30. In the case of new connections, the bill will be paid at the rate of Tk. 60 in full.

The Division of Energy and Mineral Resources gave in-principle approval to such a decision in a meeting on December 27. It said that in the case of potential new gas connections in the industrial and captive categories, customers will pay the total cost of LNG import. In the case of promised (initial consent letter/signature letter issued) gas connections in the industrial and captive categories, customers will receive up to 50 percent of the existing industrial/captive power category price. In case of excess consumption, they will pay the total cost of LNG import.

At the same time, it has been said that existing customers in the industrial and captive categories will pay the total cost of LNG import in case of excess consumption beyond the permitted load.

LNG import price means the average price of the total cost (LNG purchase price, regasification charge, VAT, tax and various margins) of the bill submitted under the long-term contract for the previous 3 months.

In light of the decision of the Energy and Mineral Resources Division, it will be sent to the Bangladesh Energy Regulatory Commission (BERC). For this, existing customers of the industrial and captive category have been asked to send monthly statements (from July 2023 to October 2024) on the amount of gas consumed in excess of the permitted load.

It is learnt that the letter signed by Petrobangla General Manager (Accounts) Abdul Jalil has been sent to the Managing Directors of 6 distribution companies. The letter states that in order to send the said proposal (proposal to re-fix gas tariffs) to the Bangladesh Energy Regulatory Commission, information regarding the amount of gas consumed in excess of the permitted load by existing customers of the industrial and captive category is required. A table has been attached to the letter and information has been asked to be provided accordingly.

Petrobangla General Manager (Accounts) Abdul Jalil confirmed to Barta24.com that the letter was sent to the distribution company.

Petrobangla sources said that gas is purchased from the state-owned Sylhet Gas Field Company Limited at a rate of Tk. 1, from Bangladesh Gas Field Company at a rate of Tk. 1.25, and from Bapex at a rate of Tk. 4 per cubic foot. Then, the average price of gas purchased from multinational companies Chevron Bangladesh and Tallo stands at Tk. 6.07 per cubic meter. Gas is available from these domestic sources, approximately 2000 million cubic feet of gas is available daily. 900 million cubic feet of gas is being supplied from LNG imports. The average price in the 2023-24 fiscal year stood at Tk. 24.38. And the average selling price of gas was Tk. 22.87. Due to this, Petrobangla has incurred a loss of Tk. 1.56 per cubic meter. In the 2023-24 fiscal year, the price of LNG brought from the spot markets fell to Tk. 65, which has to be purchased for Tk. 71 in August (2024).

The latest executive order on February 25, 2024, increased the price of electricity generation (government and IPP) from Tk. 14 to Tk. 14.75 per cubic meter and captive power from Tk. 30 to Tk. 30.75 per cubic meter. Before that, in February 2023, the price of gas was increased by an average of 82 percent by executive order. At that time, the price of gas in the power sector was increased from Tk. 5. 2 paisa to Tk. 14. And in captive power, it was increased from Tk. 16 to Tk. 30.

And through public hearings, the Bangladesh Energy Regulatory Commission increased the price of gas in June 2022. Electricity was set at Tk. 5.02, captive and fertilizer factories at Tk.16, large industries at Tk. 11.98, and medium industries at Tk. 11.78.

There was widespread criticism of the price increase in the executive order during the Awami League government. The interim government has repealed the law on gas and electricity pricing through an executive order as soon as it came to power. Power, Energy and Mineral Resources Adviser Fawzul Kabir Khan has said in several meetings that BERC will determine gas and electricity prices from now on. It is learnt that a proposal will be sent to BERC as soon as the information from the distribution companies is available. The new formula will create unequal competition in the industry, existing industries will get gas at a lower price, and new industries will not be able to survive in the competition by buying gas at a higher price. Business leaders believe that this may discourage new industries.

LP gas price remains unchanged at 12 kg LPG at Tk. 1455 in January. The price of auto gas (Tk. 66.78 per liter) also remains unchanged, the Bangladesh Energy Regulatory Commission (BERC) said.

Although the price of the product has decreased in the international market, the price in the domestic market is not decreasing due to the increase in the dollar rate. Compared to the previous month, the price of propane and butane has decreased by an average of 13.33 dollars per ton. Accordingly, the price was supposed to decrease. The price of LP gas per kg in January has been fixed at Tk. 121.19.

Chairman Jalal Ahmed announced the new price at a press conference at the BERC hall room on Thursday (December 2). Among others, members Syeda Sultana Razia, Md. Mizanur Rahman, Md. Abdur Razzak and the commission's secretary Barrister Khalilur Rahman were present.

When the price of import-dependent LPG was announced on April 12, 2021, it was said that if the Saudi price fluctuates, the base price will fluctuate. Other commissions will remain unchanged. BERC has been announcing the price of LPG every month since the announcement. However, there are allegations that LP gas has never been available in the market at the price determined by BERC.

In this regard, the BERC Chairman said, we will inform the Divisional Commissioner, Deputy Commissioners and Consumer Affairs Department in writing. They should strengthen market monitoring. Market monitoring will be further strengthened.

The decision to increase VAT on 43 products to increase revenue will not have any impact on the prices of daily necessities, Finance Adviser Dr. Salehuddin Ahmed said.

He said this while talking to reporters after a meeting of the Advisory Council Committee on Government Procurement at the Secretariat on Thursday (January 2).

The adviser said that VAT has been increased on various products not to meet the conditions of the International Monetary Fund (IMF), but in the interest of increasing revenue.

He said that the common people will not suffer. Taxes have been increased for hotels above three-star standard. There has been no increase in general quality hotels and restaurants.

The adviser also said that the country's economy will stabilize in the current new year. He said that adequate support will be provided to banks. Allocations to the education and health sectors will be increased in the next budget.