Prime Minister Sheikh Hasina has blocked a move by the energy watchdog to increase retail power tariff, considering its burden on consumers and the public at large.
The premier, who is also the power, energy and mineral resources minister, requested the independent Bangladesh Energy Regulatory Commission on Wednesday not to raise electricity prices now, as demanded by distributing companies.
"Following a meeting with the prime minister,” said Salim Mahmud, a member of the commission, “we have stalled the process to increase the retail power tariff.”
The word came when the commission, led by its acting chairman Emdadul Haque, met the prime minister at her official residence Gono Bhaban in the capital.
Mahmud said the government has also decided to subsidise utility companies to help them reduce their losses.
The commission had been planning to announce the hike at retail level last week, after assessing the revenue requirements of the distributing companies.
In November last year, distributors such as Dhaka Electricity Company Ltd, Dhaka Power Distribution Company, Power Development Board and Rural Electrification Board proposed raising power prices by 9 to 12 percent.
The companies applied for an increase in tariff to reduce the gap between the bulk price (the price the companies pay to power producers) and the retail price.
They estimate the resultant shortfall will amount to between Tk 1,300 and Tk 1,500 crore in FY 2012-13.
Since assuming office in January 2009, the incumbent government has raised retail power prices on six occasions.