The Bangladesh Power Development Board (PDB) has introduced a multifaceted strategy aimed at increasing revenue through both direct tariff hikes and the restructuring of residential billing slabs. In a formal proposal submitted to the Bangladesh Energy Regulatory Commission (BERC) on 4 May 2026, the PDB suggested significant changes to the current tiered pricing system. If approved, these measures would result in a substantial financial burden for approximately 35% of electricity consumers, primarily impacting the lower-middle-class demographic.
Table of Contents
Restructuring of Residential Billing Slabs
The core of the PDB’s new strategy involves redefining the consumption tiers to eliminate lower-rate benefits for those exceeding certain limits. Under the current system, residential consumers enjoy subsidised rates for the first 75 units of electricity even if their total usage is higher. The PDB proposes changing the second tier to encompass the 0–200 unit range for any user exceeding 75 units.
The following table illustrates the potential financial impact on a consumer using 200 units of electricity per month:
| Billing Component | Current System (Tk) | Proposed System (Tk) | Change (Tk) |
| First 75 Units (at Tk5.26/unit) | 394.50 | – | – |
| Remaining 125 Units (at Tk7.20/unit) | 900.00 | – | – |
| Subtotal (Current Rates) | 1,294.50 | 1,440.00 | +145.50 |
| Subtotal (with Proposed Tk8.20 rate) | 1,294.50 | 1,640.00 | +345.50 |
Note: Figures exclude demand charges and Value Added Tax (VAT).
Economic Rationale and Policy Objectives
Rezaul Karim, Chairman of the PDB, attributed the proposal to severe financial deficits. He noted that the board is currently struggling to fund fuel purchases, including oil and coal, and meet outstanding payments to power plants. The situation has been exacerbated by a nearly 50% depreciation of the Taka against the US Dollar over recent years, alongside rising global energy prices.
The PDB projects that the proposed slab restructuring alone could generate an additional Tk2,657 crore in annual revenue from retail sales. To mitigate political backlash, officials clarified that “Lifeline” consumers (using up to 50 units) and those in the first tier (up to 75 units) would not face direct tariff increases. However, approximately 10 million consumers falling into the 76–200 unit bracket—representing 23% of the total residential base—would lose the benefit of the initial lower-tier pricing.
Proposed Regulatory Reforms
Beyond immediate price adjustments, the PDB has requested the implementation of a “Multi-year Tariff” system and semi-annual price adjustments. Key features of the proposal include:
Automatic Adjustment Formula: A mechanism to link wholesale electricity prices directly to fuel costs.
Bi-annual Reviews: Consolidating price changes every six months to manage fluctuations.
Effective Date: The PDB has requested the new rates to be implemented from 1 June 2026.
Criticisms and Sector Analysis
The proposal has met with significant opposition from consumer rights advocates and energy experts. M. Shamsul Alam, Energy Adviser to the Consumers Association of Bangladesh (CAB), argued that the PDB should focus on reducing systemic inefficiencies rather than passing costs to consumers. He highlighted that the government continues to pay high capacity charges for idle power plants and purchases electricity at rates significantly above market value.
Specifically, national committee reports indicate that furnace oil-based plants are paid 40–50% above market rates, while solar energy contracts are often 70–80% higher due to non-competitive bidding processes. BERC Chairman Jalal Ahmed stated that the commission will evaluate the proposal through a technical committee and hold public hearings on 20 and 21 May before reaching a final decision.