Energy Bangla

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Dhaka Saturday,  May 26, 2018

Proposal On Tax Rebate At LNG Import

EB Reprot

The government has set a plan to import Liquefied Natural Gas (LNG) from abroad to meet the country’s ever growing demand of natural gas. The price of LNG will be at least 3 times higher than that of natural gas; as a result the government is planning to waive taxes at importing LNG.

Recently a discussion meeting held on adjusting the price of gas after LNG import. The meeting was arranged at the Bidyut Bhaban in the city where other high officials of the concerned ministry were also present.

Petrobangla is planning to import 500 mmcf of LNG at a daily basis and to add the imported gas to the national grid already a project of installing an LNG terminal and a Re-gasification unit at Maheshkhali is going on. A project of pipeline installing with a diameter of 30 inch and a length of 91 kilometers from Maheshkhali to Anawara is also undergoing. Prior to that, the government has signed a deal to import LNG from Qatar.

The storage capacity of the LNG terminal will be 1 lac 38 thousand cubic meters; the terminal will be capable of delivering 500 mmcf of gas daily and 6 days a week. The cargo ships that will carry the LNG will take up to 7 days to reach to Bangladesh from Qatar and it will take up to 2 days to unload the gas from ships to terminal.

The current market price is $8 for per thousand mmcf of LNG and the re-gasification cost will be around $0.5 for thousand mmcf of LNG. It will cost $24 million only to import LNG to fill the terminal of Maheshkhali. Except for this, Petrobangla will charge 15 percent of import tax and 3 percent of advance income tax as per the policy and other customs taxes will also be allowed as per rule, all together raising the cost of LNG to an almost unaffordable extent.

However, a committee was formed under the Energy and Mineral Resources division to determine the final price of gas when the LNG will be in grid.  The committee suggested rebating or waiving the sd/vat and complementary tax while importing LNG. In the recent meeting, the officials also urged on reconsidering the customs tax at LNG import.

Importing LNG is not a part of any long-term plan to defend the current energy crisis of the country, said one of the high officials of the energy division.  However, the current market price of natural gas at consumer end is $2.17. The price of imported LNG at consumer end with daily 500 mmcf import capacity may take a figure of as much as $23.11 including re-gasification cost, transmission-distribution charge, tax and vat. So the mixed price of LNG and local natural gas will be somewhat around $4.35. But, if the sd/vat is waived from LNG then, the price of LNG may drop to $10.4 which is still $8 more from the current price of country’s own natural gas.

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