The government is set to raise electricity prices at the retail level a year after the last hike in a bid to offset mounting subsidy bills amid the taka’s devaluation against the dollar.

Power prices will rise by Tk 0.34-0.70 per unit and the new rates will be effective from the March billing, according to State Minister for Power, Energy, and Mineral Resources Nasrul Hamid.

Gas prices for power plants will also increase next month, he said on Tuesday. However, the cost of gas for residential and industrial users will remain unchanged.

Power prices were raised for the last time in March 2023 by 5 percent as part of a routine readjustment. The weighted average of electricity price stood at Tk 8.24 per unit after that hike.

Hamid defended the move to hike gas and electricity prices. "The price of electricity fluctuates based on the cost of fuel everywhere around the world. We also have to adapt. There's simply no alternative."

Elaborating on the economic pressures contributing to the adjustment, he said, "The rise in the price of the dollar has increased subsidy bills. Over the next three years, we aim to make adjustments that will keep the burden at a manageable level."

He also outlined the government's strategy to mitigate the financial impact on consumers, saying, "For electricity, we are proceeding with price adjustments to gradually eliminate subsidies. For oil, we are adopting a dynamic pricing model."