24 lakh prepaid gas meters on the cards to cut wastage

The government is going for installation of over 24 lakh prepaid gas meters at a cost of around Tk5,000 crore.

Sources at the Economic Relations Division (ERD) reveal that it has approached three foreign lenders for financing the project and so far the World Bank has expressed initial consent to a proposal and has issued a project information document to further accelerate the discussion.

Installation of the meters will help reduce consumer burden, systems losses and gas wastage, the World Bank document notes.

The ERD has asked for about Tk3,000 crore from the World Bank, Tk1,281 crore from the Japan Bank for International Cooperation (JBIC) and Tk942 crore from the Asian Development Bank (ADB) for implementing three projects in this regard.

The ADB has been approached to finance part of the Tk1,087 crore for 5.49 lakh prepaid meters and the JBIC to provide the bulk of the Tk1,473 crore needed to install another seven lakh meters.

The $300 million from the World Bank has been sought under "Gas Sector Efficiency Improvement and Decarbonisation Project", which includes a $270 million sub-component focusing on installing 11.86 lakh meters.

Engineer Md Shafiqul Islam, general manager, Planning and Development Division of Titas Gas Transmission and Distribution Company Limited, told The Business Standard that the implementation of these projects would start after confirmation of aid from the lenders.

He said Titas was already installing about 3.20 lakh prepaid meters through an ongoing project approved by the Executive Committee of the National Economic Council (Ecnec) in 2015.

Sources at the planning ministry said that project was set to be completed by 2018, but was extended to December 2022, alongside increasing the number of meters to be installed by one lakh. 

If the latest projects are greenlighted, the bulk of the meters – 23.5 lakh – will go to Titas, covering 93.44% of the total household customers of the largest gas distribution company in the country.

The remaining 86,000 will be for the Pashchimanchal Gas Company Limited, which serves around one lakh households.

The World Bank's project information document noted that residential gas consumers in Bangladesh pay a fixed monthly bill irrespective of the gas consumption which leads to very little incentive for efficient use of the resource.
Prepaid meters would change that. 

Dr Mohammad Tamim, a professor of the Department of Petroleum and Mineral Resources Engineering at the Bangladesh University of Engineering and Technology (Buet), told TBS that prepaid meters could help eliminate discrepancies in pricing. 

Some were paying Tk1,000 for 24-hour gas usage, while others paid the same for only two hours of usage, he said, emphasising the importance of a metering system on usage in establishing fairness.

Tamim further said meters could reduce the consumption and wastage of gas, adding as awareness had increased among people, the tendency of keeping the stove burning all night had diminished. 

Installation of prepaid meters in the entire service area of ​​Titas can save about five crore cubic feet of gas per day at the residential level, he added.

Merits of the meter

Professor Tamim's views on the benefits of prepaid meters were mirrored by the Implementation Monitoring and Evaluation Division (IMED) of the planning ministry in its deep monitoring report made in the fiscal 2018-19, which found that such meters reduced consumer expenditure on gas by 87%.

In 2019, after a rigorous evaluation of the Titas Gas prepaid meter scheme, the IMED also reported that gas usage by each of 33 families who got prepaid connections dropped by 33 cubic metres a month. 

It also found that the average bill for meter users fell to Tk300.38, which was 62.45% lower than the flat rate of Tk800 for a double burner connection at that time.

The World Bank in its project information document said proper metering would help determine how and where gas leakages were occurring in the system, which could prevent waste and prevent 70% methane emissions in the gas sector through existing technology. 

The report further revealed that the installation of gas meters will allow domestic consumers to have accurate gas readings, immediate response from suppliers to gas leaks, and a more efficient and cost conscious approach to gas use. 

While prepaid meters could result in a loss of revenue for gas distribution companies, the IMED's report suggested that Titas could earn about Tk5 crore taka per month by distributing the gas saved to two lakh industrial connections at a comparatively higher price. 

A design fraught with delays

According to different sources, work for installing prepaid meters began on January 1 2015. 

Delays in approvals and procurement were exacerbated by LC complications and contractors failing to meet deadlines.

According to an IMED report, the contract for the purchase of meters was also signed eight-and-a-half months after schedule. 

Sources added that meters could not be installed for various reasons, including rust in gas lines. 

Many customers also were uninterested in having meters or repairing leaking lines at their own expense, resulting in more hold ups.

Professor Tamim of BUET, however, said the fall in 47% of revenue during the prepaid meter pilot project could have dissuaded gas distributors. 

He, however, also said Titas could solve the problem by slightly increasing gas price for metered users and providing gas to industries.

Apart from Titas and PGCL, other gas distribution companies are the Karnaphuli Gas Distribution Company Limited, Jalalabad Gas Transmission and Distribution System Ltd, Bakhrabad Gas Distribution Company Ltd and Sundarbans Gas Company Ltd.