Electricity prices have been increased at both the wholesale and consumer (retail) levels in Bangladesh. At the wholesale level, the tariff has risen by 19.85 percent, with the price per kilowatt-hour (kWh) increasing from BDT 7.00 to BDT 8.39, a rise of BDT 1.39 per unit. At the consumer level, electricity prices have increased by 16.68 percent, raising the average tariff from BDT 9.11 to BDT 10.63 per unit — an increase of BDT 1.52 per unit. The latest adjustment also raises electricity rates for lifeline consumers (those using up to 50 units per month) by nearly 15 percent. Electricity transmission charges have also been increased by 23.96 percent.
The announcement comes at a time when fuel prices have already been raised several times. Sector experts believe the latest electricity tariff hike will have adverse effects on agricultural and industrial production, as well as on the overall living cost. Instead of addressing structural problems in the power sector, such as capacity payments, system losses, irregularities, corruption, and mismanagement, the government has once again shifted the burden onto consumers through higher tariffs, according to them.
Despite the previous interim government having initiated some reform measures in the power sector, it failed to reduce the sector’s financial losses. Over the years, electricity prices have repeatedly been increased as a means of reducing these losses without implementing meaningful reforms. Experts argue that the new government is now following the same approach.
Over the past one and a half decades, the ousted Awami League government accumulated substantial liabilities due to excess power generation capacity and poor management of the energy sector. Large amounts of foreign currency left the country during that period as power plants were built without tenders, and imports of liquefied natural gas (LNG) increased instead of expanding domestic gas exploration.
Following the fall of the Awami League government, the former interim government pledged reforms in the country’s power and energy sectors. But as part of its structural reform agenda, it failed to make progress on tariff negotiations, the retirement of inefficient power plants, reductions in capacity payments, corruption control, or reducing import dependence in the sector.
During last month’s public hearing on the proposed electricity tariff hike, business leaders, entrepreneurs, consumer rights groups, and other stakeholders urged the Bangladesh Energy Regulatory Commission (BERC) to focus on reforming the power sector in order to reduce electricity prices rather than increase them.
Commenting on the issue, Professor M Tamim, vice-chancellor of Independent University, Bangladesh, told Bonik Barta, “The former interim government had initiated a reform process in the power and energy sectors, although no meaningful reforms were ultimately implemented. Had BERC properly ensured accountability and oversight in the sector, some structural reforms might have taken place. In that sense, the commission has failed in its responsibility. An increase in electricity tariffs won’t be confined to electricity bills alone; its impact will extend to the overall cost of living. Higher production costs will particularly create a risk of price increases across various goods and services.”
Speaking on the electricity tariff hike on Wednesday, SM Nazer Hossain, vice-president of the Consumer Association of Bangladesh (CAB), said, “Consumers had demanded an end to mismanagement, irregularities, corruption, system losses, and capacity payments in the power sector. Instead of addressing these issues, the burden has once again been placed on marginal and small consumers, which is deeply unfortunate. At a time when many countries are considering waiving utility bills for low-income consumers, raising electricity prices for small consumers in the name of reducing subsidies is by no means justifiable. Electricity, gas, and other forms of energy are the primary drivers of the economy. Any increase in energy prices will naturally have a negative impact on economic activity and will fuel inflation.”
Electricity tariffs at both the retail and wholesale levels were last increased in February 2024. BERC has consequently raised electricity prices again after a gap of two years and four months.
BERC announced the new tariffs at a press conference yesterday. Electricity prices have been increased by between 15 percent and 19.94 percent across different consumer categories and tariff slabs, according to the commission. The revised rates have come into effect from June.
Under the revised tariff structure, the electricity rate for lifeline consumers using up to 50 units per month has been increased from BDT 4.63 to BDT 5.32 per unit, representing a 14.90 percent rise. The lifeline consumer category was introduced to provide electricity to low-income households at subsidised rates. Under the prevailing tariff system, consumers using up to 50 units of electricity per month are classified as lifeline consumers. Over the past 16 years, electricity tariffs for this category have nearly doubled. On March 1, 2010, lifeline consumers paid BDT 2.50 per unit of electricity. As of June 2026, they will be required to pay BDT 5.32 per unit.
For consumers using up to 75 units per month, the tariff has been increased from BDT 5.26 to BDT 6.18 per unit, a rise of 17.49 percent. The rate for consumers using 76 to 200 units has been raised by 18 percent, from BDT 7.20 to BDT 8.50 per unit. For those consuming 201 to 300 units, the tariff has increased by 19.89 percent, from BDT 7.59 to BDT 9.10 per unit.
Electricity prices for consumers using 301 to 400 units have been increased by 19.95 percent, from BDT 8.02 to BDT 9.62 per unit. For those using 401 to 600 units, the tariff has risen by 18.46 percent, from BDT 12.67 to BDT 15.01 per unit. Consumers using more than 600 units per month will now pay BDT 17.35 per unit, up from BDT 14.61, reflecting an increase of 18.75 percent.
The electricity tariff for irrigation pumps has also been increased by 15 percent, from BDT 5.25 to BDT 6.04 per unit. For small industries under the flat-rate category, the tariff has been raised by 18.30 percent, from BDT 10.76 to BDT 12.73 per unit.
Electricity prices for educational institutions, religious establishments, and hospitals have been increased from BDT 7.55 to BDT 9.05 per unit, representing a 19.87 percent rise. The tariff for street lighting and water pumps has been raised from BDT 9.71 to BDT 11.46 per unit, an increase of 18.02 percent. Electricity rates for battery charging stations have been increased from BDT 9.62 to BDT 11.36 per unit, also reflecting an 18.02 percent increase.
Experts believe that inefficiency, rising capacity payments, irregularities, and corruption are driving up costs in Bangladesh’s power sector. Consumers have consequently been bearing the burden of these costs for years. During yesterday’s press conference, Bonik Barta asked BERC Chairman Jalal Ahmed how the commission plans to hold power companies accountable on these issues.
In response, he said, “The Bangladesh Power Development Board (BPDB) will be asked to ensure that electricity is being procured from the lowest-cost sources in order to reduce losses in the power sector. Letters will also be sent to the companies regarding merit-order dispatch, bringing capacity payments down to a reasonable level, and conducting dependable capacity tests for power plants.”
Asked whether the tariff hike had been approved hastily, barely one to two weeks after the public hearing, the BERC chairman said, “There was no pressure. The decision was expedited in consideration of the budget.”
Responding to another question, he said, “The price increase will raise consumers’ expenses, but no economic impact assessment has been conducted. There’s scope to do so.”
Following the increase in wholesale (bulk) electricity tariffs, BPDB is expected to generate an additional BDT 142 billion in revenue. But even after this increase, the organisation could face a deficit of BDT 410 billion in fiscal year 2026–27, which will have to be covered through government subsidies. For the current fiscal year, BPDB has been allocated BDT 370 billion in subsidies.