The approval of the Bangladesh Energy Regulatory Commission (BERC) must be obtained before signing an agreement to set up a power plant. BERC Chairman Jalal Ahmed said that the Power Division has been informed of such a legal obligation through a letter.

He made this comment at a workshop organized at the BERC conference room on Tuesday (February 18).

The BERC Chairman said that the Regulatory Commission is now going to play a proactive role. I hope that it will be proven through our work.

In response to a question, he said that the commission has so far only announced wholesale and retail electricity tariffs. But the law has given BERC the authority to approve agreements to set up power plants. I have asked BERC to take approval before taking up the project. They will be able to tell me why the previous commissions did not do this. Along with the law, the surrounding situation is also a big issue.

How justified is the proposal to increase gas prices in new industries? Why was the discriminatory gas price taken into account in the industry? In response to a question, the BERC Chairman said, we want to hear everyone's opinions, so a hearing will be held. A final decision will be made after taking the opinions of all parties.

In the past, it has been seen that consumers objected, but a different decision was made after discussing with the ministry. In response to such a question, he said, since subsidies exist in these sectors, the amount of subsidy the government will provide has to be taken into account in the tariff. That is why the issue of discussion with the ministry is involved.

In response to another question, he said, now Bangladesh Petroleum Corporation no longer determines the price of any product. Earlier, they used to announce the price of several products including jet fuel. Now BERC will finalize the price of jet fuel. Petrol, octane, diesel and kerosene are being determined through an executive order. The regulations are awaiting approval. Hopefully, BERC will determine the prices of these too soon.

BERC Director (Gas) Didarul Alam said, although BERC was formed by law in 2003, it made its formal debut in 2008. In 2008, the first electricity price adjustment was made, and since then, the wholesale price has been adjusted in 9 phases, the retail price in 10 phases and the transmission cost in 2 phases. On the other hand, the first gas price order was issued in 2009. So far, gas prices have been increased in 9 phases. Currently, the proposal to increase gas prices in new industries is awaiting hearing.

Another function of BERC is to resolve disputes. Out of 677 complaints received since its establishment, 544 have been resolved. That is, 80 percent of the disputes have been resolved. On the other hand, out of 239 complaints from consumers, 232 (97.07 percent) have been resolved, he said.

The workshop organized for members of the Forum for Energy Reporters Bangladesh (FERB), commission members Syeda Sultana Razia, Md. Mizanur Rahman, Md. Abdur Razzak and Shahid Sarwar.

The obligation of feasibility study through a third party in oil and gas exploration remained. Feasibility study through a third party is considered one of the obstacles to the backwardness of the energy sector. In whose interest is it maintained, who will benefit from it is the big question now!

On the one hand, feasibility study is a waste of time, and on the other hand, it is a waste of money. After much deliberation during the previous government, the process of exempting from feasibility study in oil and gas exploration was started. The approval process was almost in the final stage. Janendra Nath Sarkar, former chairman of Petrobangla, played a leading role in the work.

His argument was, if we dig a well, we may get gas, or we may not. If we get gas, there will be a lot of profit, and if we don't get it, the entire investment is zero, what is the point of feasibility study here again? This is not a bridge-culvert that we will verify the feasibility. The return may come from here, it may not come again. Before we finalize the well drilling site, a lot of work including seismic survey has to be done, which is also a kind of feasibility study. So why should we verify the feasibility through a third party.

The consultant recruitment process is a very long process, and also very expensive. The work that will cost Tk. 50 to 60 lakh through a consultant. Petrobangla can complete the same work for a nominal price of Tk. 50 thousand to Tk. 1 lakh. The work that takes a consultant a few months to do, Bapex-Petrobangla can complete the work in 15 days. The work that the consultant does also depends on the information of Petrobangla and with the help of their people. A group from the middle takes some money and leaves. Many wells have failed in the past and this may be the fate in the future too. If 10 exploration wells are drilled and gas is found in 1, it is considered commercially successful. In Bangladesh, this rate of achievement is three to one.

A source in Petrobangla said that the Planning Ministry had dropped the feasibility study through a third party in the case of exploration wells, 2D, and 3D. It would have been finalized only after receiving the approval of the Cabinet Division. But it has been canceled without giving approval.

Petrobangla Chairman Rezanur Rahman confirmed the cancellation to Barta24.com. He said that he has rejected the proposal to exempt the feasibility study through a third party. If the DPP is above Tk 50 crore, the feasibility study will have to be done through a third party.

The current Secretary of the Energy and Mineral Resources Division, Mohammad Saiful Islam, also tried hard to get exemption from the feasibility study. He gave a letter to the Secretary of the Planning Division.

In that letter, he requested the Energy and Mineral Resources Department to exempt the feasibility study through a third party for the investment project above Tk. 50 crore issued by the Planning Division in June 2022 for the formulation of the DPP.

In that letter, he wrote that the letter sent earlier to the Planning Commission seeking exemption from the obligation to conduct a feasibility study is being reconsidered by the Planning Commission. He wrote that it is possible to conduct a feasibility study without additional expenditure by forming a committee comprising the relevant experts of Bapex in the fastest time and in a cost-effective manner. In the case of important projects, many steps have to be followed in completing the feasibility study of the project. It takes 6 to 12 months to get the final feasibility study report after following all these activities. In addition, 30 to 40 lakh taka is required for each project for the study. An example of how the DPP complexity affects Mobarakpur, Pabna, can be this example. Work started with a 10,000 PSI (pressure square inch) blowout control preventer (BOP) to dig a well in Mobarakpur. During the digging of the well, it was found that the internal pressure was 12,000 PSI. The pressure was increasing further, forcing the work to be stopped and the DPP to be revised since there was no financial resource of 15,000 BOP in the DPP. It took a long time to approve the RDPP. Bangladesh did not learn from this either.

Many such complications can arise, which are very difficult to predict in advance. How many tools have to be purchased, they are excluded from the list of PPR, and the price is also unknown. In that case, when buying, there is a long process, preparation of requisitions, store clearance, technical specification committee, writing to the manufacturing company asking for possible prices, and then in some cases, approval from the cabinet regarding the purchase. It takes more than 2 years to do all this. The Division of Energy and Mineral Resources has to face all such complications. However, the concerned company has to keep the wells unprotected and look at the file.

Amjad Hossain, former Managing Director of Bapex, told Barta24.com, "Feasibility studies often hinder work in oil and gas exploration. I used to work in many ways. In the case of exploration wells, it was said without land acquisition. I then added a condition that if gas is found, I will acquire the land immediately. During the excavation of Shahbazpur No. 2, I temporarily acquired 7.5 acres of land for the road and well. If gas is found, it is acquired permanently immediately. That condition was added to the DPP.

He said, there was a lack of foresight in the case of Pabna, decisions should have been taken based on geophysical history. Many of us do not have transparency, many do not have the idea, the issue of risk should be kept in the DPP. In this case, the PDK should be smart and diplomatic. In my time, I would have kept some extra money, If not needed, the money would have been returned.

Energy experts believe that no one considered it necessary to take into account that the energy sector is a specialized sector. Some people act with foresight. If there is a crisis in the country, they can import LNG from abroad, hire foreign contractors. This allows them to make commission trade, which is not the case when a domestic company digs wells and extracts gas.

An official of Bapex told Barta24.com on condition of anonymity that an organization of former bureaucrats (IIFC) works in the field of feasibility studies. Those who are now unable to complete the work. That company has close contacts with top bureaucrats. They may be working as catalysts here because if the feasibility study is closed, their income will decrease. Now they are charging Tk. 40 lakh for each project. Our people may be working with our data, they are just giving a seal. And Petrobangla wanted us to finalize it by holding a meeting with our own people, our own information, and BUET teachers.

Energy experts believe that the current gas crisis is due to the lack of special attention to this sector. Exploration and development cannot be considered as building bridges and roads. And if exploration is not accelerated, the gas crisis cannot be eliminated.

Commerce Adviser Sheikh Bashiruddin has expressed hope that the shortage of edible oil will be resolved in the next 7 to 10 days.

He expressed this optimism in response to questions from reporters after the meeting of the Advisery Council Committee on the current labor situation of industrial establishments in Beximco Industrial Park at the meeting room of the Ministry of Shipping at the Secretariat on Wednesday (February 12).

When attention was drawn to the issue of excessive prices being charged due to the oil crisis in the market, the Commerce Adviser said, "At the moment, if you look at all the Ramadan products - dates, chickpeas, pulses, sugar, only oil has a problem. I hope that the oil market will go from stable to down in the next 7 to 10 days and the supply shortage will be resolved."

He said, "There is no chance of instability in the prices of chickpeas, beans, dates, pulses and sugar with Ramadan ahead." There is no shortage of these products.

The Energy and Mineral Resources Division is following the path of the Awami League government's bureaucracy. It has continued its efforts to keep the power to determine the price of fuel oil in its own hands through various tricks.

It has adopted a strategy of delaying the implementation of the interim government's instructions. Even after 6 months, the fuel oil regulations have been left hanging, just as the Awami League government had left them hanging. This has raised questions about the government's role.

The Bangladesh Energy Regulatory Commission (BERC) Act has entrusted the institution with the authority to determine the prices of all types of fuel. Section 34 (3) states that the BERC shall formulate regulations. However, there is a condition that until the regulations are formulated, the government can determine them by notification. The price of fuel oil has been determined by executive order after suspending regulations in various ways for a long time.

Many have expressed disappointment that the interim government is also following the same path. Former member of the Bangladesh Energy Regulatory Commission (BERC), Maqbul E-Elah

Chowdhury, told Barta24.com that it is very surprising why the regulations have not been approved even after 6 months.

The biggest reform will be achieved if BERC is implemented. He commented that many corruption and irregularities will automatically stop if BERC is strong.

In 2003, BERC was formed as a neutral and quasi-judicial institution through the Energy Regulatory Commission Act. BERC officially started its journey in 2009. So far, 13 regulations have been formulated. Another 12 regulations have been pending by the ministry for more than a decade.

Although the law gives the authority to determine the prices of all types of energy, BERC has been determining the prices of only gas and electricity due to the pending regulations. In 2023, the law was suddenly amended to include a provision for price adjustment (up/down) in the executive order. Since then, the Regulatory Commission has been practically unemployed as the prices of gas and electricity have been determined by the executive order.

The interim government announced in the first week that the prices of electricity and gas will no longer be determined by the executive order. Accordingly, the power was returned to the hands of BERC by amending the law. But the issue of fuel oil has been left in the hands of the previous government. As before, since the petroleum regulations were not approved, fuel oil prices are being determined through a notification by raising smoke. Last month, the Energy and Mineral Resources Division also adjusted the prices of diesel, petrol, and octane.

CAB's Energy Adviser Dr. M Shamsul Alam told Barta24.com, we want to see BERC strong and effective in the future. So far, the government's position on the BERC issue is not very clear to us. They are also determining fuel oil prices following the path of the previous government. They are speaking in the tone of the previous government. We are monitoring the situation, if necessary; we have obtained an order to announce the price of LPG (by filing a writ). The CAB will not hesitate to follow that path on the fuel oil issue.

BERC Chairman Jalal Ahmed told Barta24.com, the regulations have been submitted to the ministry even before I joined. I am insisting on approving them after joining. However, the issue of combining the three separate regulations (distribution, transmission and retail) for fuel oil has come to the fore. We have sent the three together. Communication with the ministry is ongoing.

In response to a question, the BERC Chairman said, some have raised the question of whether the consumer will be able to bear the price if the price suddenly increases. I have informed the energy adviser that even if BERC sets the price, there is an opportunity to provide subsidies if necessary according to the BERC Act. I see no reason to be concerned about this issue.

Former BERC member (administration) Mohammad Abu Faruk told Barta24.com, if BERC is implemented, half of the energy sector will be reformed. If it is given full powers according to the law, a lot of corruption will be stopped. In many countries, including India, to make an agreement, the approval of the Regulatory Commission is required. If it can be done in our country too, then they (BERC) will see whether it (the project) is necessary at all, and whether the price is reasonable or not? If there is domestic interest, they will approve it. It is possible to save thousands of crores of taka at the macro level.

As BERC finalized the prices through public hearings, various inconsistencies of the utilities used to come to the fore. This created a kind of pressure on them, which was becoming a culture day by day. The Awami League government strangled that process. The interim government (August 27) repealed the law on determining electricity and gas prices through an executive order and published a gazette. Through this, BERC has regained the sole power to determine electricity and gas prices at the consumer level. But due to the lack of regulations, fuel oil prices are still being determined by executive orders. Due to this, many have questioned the goodwill of the interim government.

Energy experts said that BPC imports oil itself and markets it through companies and dealers. If they decide the price, it is not possible to protect the interests of consumers. BPC has emerged as a dual entity. Either they will regulate or they will market. What is happening now is completely against the law.

Mohammad Saiful Islam, Secretary of the Energy and Mineral Resources Division told Barta24.com, we are working on the regulations, we hope to be able to do it soon.