The Finance Adviser Salehuddin Ahmed’s proposal to wave the 15 per cent import-stage Value Added Tax (VAT) on LNG import will not give any benefit to the consumers, it will help Petrobangla, another government entity to manage its financial book and the consumers will have to pay more to pull out the Petrobangla from financial crunch in future, experts said.
“In a significant move to alleviate the import costs of LNG, government has proposed waiving the 15 import-stage VAT on LNG, now the question is who is importing LNG? It is Petrobangla, another government entity…so there is no room for any benefit for the consumers, they have to pay as usual or more if the BERC once again hike the energy price to reduce subsidy in energy sector,” Dr. Ijaz Hossain, Professor and Dean of Engineering of BUET, (Specialization, Energy and Environment) told on his first hand reaction over the proposed budget of the current fiscal year.
He said to address the energy issue we have only one option to increase our own gas output, unfortunately it is being ignored for many years, we have to give more genuine focus on exploration if we want to address the energy issue in true sense.
Focusing on the government plan to achieve its goals of attaining 6,145 megawatts (MW) and 17,470MW of renewable energy by 2030 and 2041, Dr. Ijaz Hossain said that the robust plan to achieve the target in renewable energy is power sector is a plan having without any direction, it did not mention that the investors
could be able to reduce the cost of production.
“The government should withdraw all tax and vat form all equipment of solar energy system for two years, which may help to encourage the investors to invest here,” Ijaz said.
Vice chancellor of the IUB Dr. M Tamim told that, obviously the waver on LNG import will reduce the burden but our challenge is to ensure energy supply, we don’t have the resources, how much we could be able to procure from the tax waiver, he asked.
He urged the government to waive all tax and VAT from the import of renewable energy’s accessories’ to facilitate the sector.
Energy Adviser Muhammad Fouzul Kabir Khan said, “We are giving lots of subsidies in the gas sector. The money we would save from the VAT cut will help to import more LNG to meet the growing demand of gas in industry and the power sector.”
“If international LNG prices stay favourable, we could gradually phase out subsidies. Otherwise, the VAT cut alone won’t be enough.”
Meanwhile, in his budget speech, the Finance adviser said the government has taken initiatives to increase oil and gas exploration and production through its own effort to ensure energy security, but he did not elaborate.
“The BAPEX has planned to drill 69 wells and complete the workover of 31 wells using its own rigs. At the same time, steps are being taken to develop cost-effective and sustainable infrastructure to help control energy prices as medium term,” he said, however, it was an old plan and government took snail pace to implement it for the last 10 years.