Energy Bangla

Around Tk 1166.36 crore, out of Tk 5500 crore allocated for power sector subsidy is likely to come back to the government’s exchequer in the current fiscal as the Bangladesh Power Development Board (BPDB) required only Tk 4333.64 crore to compensate electricity costs.
The power sector subsidy even may come down further, State Minister for Power and Energy Nasrul Hamid informed the Jatiya Sangsad during the budget session, adding, the government has no plan to cut power tariff.
The BPDB requires Tk 4333.64 crore during last 12 months including this current month, concerned officials said.
But, the BPDB spent Tk 8,000 crore in 2014-15 fiscal to compensate for buying costly electricity from the oil-run power plants.
The government allocates subsidy as part of its budgetary sanction every year.
Besides, the government has proposed another fund worth Tk 6000 crore in the next fiscal year 2016-17.
Tremendous fall in fuel prices in the international market over a year is behind the reason for reduction of power subsidy, officials said.
Bangladesh Petroleum Corporation (BPC) has made a profit of Tk 12,186 crore in the current fiscal year due to recent price cut in the international market.
The government has reduced the price of furnace oil, mostly used by industries and power plants, by more than 30 percent to Tk 42 a litre on March 31, 2016 taking this advantage.
Besides, it cut the prices of octane and petrol by Tk 10 a litre and diesel and kerosene by Tk 3 per litre on April 24, 2016. The BPC will still make profit of Tk 23 to Tk 28 per litre of petrol and octane and Tk 16 in diesel and kerosene despite fuel tariffs cut.
According to BPDB, the government has been operating 43 oil-fired power plants having capacity to generate 3,463MW of electricity. The country produces 29.16 percent of its total electricity from fuel-fired plants.
The government also invited bid to initiate ten more oil-fired plants to take the ratio to 31 percent. But energy expert Prof M Tamim advised the government not to take more fuel-based power projects considering the impact of any probable international oil market volatility.
The government’s power subsidy for compensating the costly rental, quick rental and independent power producers projects will be considered as ‘loan’, a finance division directive, however, said.
The Finance Division recently issued a directive to power division with eight conditions to release the loan. It tagged the condition that power division officials or employees will be responsible for any irregularities, if found, while disbursing the fund.
As per the order, finance division said the fund release for power division will be considered as ‘loan’ and the power division would sign a loan deal with the division for getting the loan.