The gas tariff for fertilizer factories in Bangladesh has been increased by 83 percent, rising from Tk 16 to Tk 29.25 per cubic meter. The new rate will take effect from December, according to an order issued by Bangladesh Energy Regulatory Commission (BERC) Chairman Jalal Ahmed.
The announcement was made on Sunday (23 November) afternoon at a press briefing attended by BERC members Md. Abdur Razzak, Mizanur Rahman, Brigadier General (Retd.) Shahid Sarwar, and Syeda Sultana Raziya, among others.
Petrobangla and the gas distribution companies had earlier proposed raising the tariff from Tk 16 to Tk 40, which was reviewed in a public hearing on October 6.
In its proposal, Petrobangla had argued that the increased tariff would allow the import of seven additional LNG cargoes, ensuring uninterrupted gas supply to the fertilizer sector. It projected full-capacity supply — 250 million cubic feet per day — for six months (October–March). For the remaining months, it proposed supplying 165 million cubic feet in April–May, 175 million in June, and 130 million in July–September.
During the public hearing, Delwar Hossain, Director (Planning & Implementation) of BCIC, raised concerns that gas supply was not ensured even after prices were raised in 2022 from Tk 4.45 to Tk 16 with promises of improved supply. Instead, supply had decreased, he said. He added that if fertilizer factories receive full gas supply, they could produce over 2 million tonnes of fertilizer domestically. At that capacity, even if gas costs Tk 30, domestic production would still be cheaper than imports.
Bangladesh requires 3 to 3.2 million tonnes of urea annually, but gas shortages force the country to import 1.6 to 2.1 million tonnes each year.
Delwar also noted that if gas is priced at Tk 30 and 2 million tonnes of fertilizer are produced, the per-kg production cost would be around Tk 46, compared to Tk 61 for imported fertilizer. Currently, producing one kilogram of urea costs approximately Tk 38, while the government sells it at Tk 27 and supplies it to BCIC dealers at Tk 25, resulting in a per-kg subsidy of Tk 13.
Several fertilizer factories rely heavily on gas:
• Ghorashal Palash Fertilizer PLC: 72 million cubic feet/day
• Shahjalal Fertilizer Co. Ltd.: 41 million cubic feet/day
• Chattogram Urea Fertilizer Ltd.: 43 million cubic feet/day
• Jamuna Fertilizer Co. Ltd.: 41 million cubic feet/day
• Ashuganj Fertilizer & Chemical Co. Ltd.: 48 million cubic feet/day (currently shut due to high gas consumption from outdated facilities)
Additionally, KAFCO, a foreign-owned fertilizer plant, requires 55 million cubic feet/day and receives uninterrupted gas under its contract. Bangladesh purchases fertilizer from KAFCO at international prices in US dollars. The contract was recently renewed at a gas rate of Tk 30.
