PDB, BPC seek  Tk 12,000cr subsidy

The Power Development Board has sought a total of Tk 8,120cr in subsidy from the government to offset its losses (estimated) to be incurred in the financial year 2017-18.
Meanwhile, the Bangladesh Petroleum Corporation (BPC) has also sought a total of TK 3,000cr to TK 4,000cr as subsidy to offset its estimated losses to be incurred for importing fuel in 2017-2018 fiscal year, according to the Finance Ministry.
Earlier, the subsidy in the power sector was set at Tk 6,500cr in the fiscal year 2017-18, up from Tk 6,000cr this year.
However, for the first time the government is planning to subsidise gas price as it is importing liquefied natural gas at a rate much higher than that of the locally produced gas.
"As per schedule the first consignment of imported LNG has arrived and will be added to the national grid by June. We estimated that we need to give some subsidy to the gas sector amounting to      Tk 3,000cr to Tk4, 000cr," a senior official said.
State Minister Nasrul Hamid said the government will continue providing subsidy to the power sector for another five to seven years.
"We provide electricity only at Tk 2 per unit to the lifeline consumers, which are a direct subsidy from the government. To recover from the situation, we'll adopt new low cost technology in electricity generation," Nasrul said.
"The power sector needs huge subsidy amid the need for increasing the country's power generation capacity. As we will use LNG for gas production so the price of electricity would be shooting up," the official added.
A subsidy amount of Tk 3,000cr to Tk 4,000cr might be earmarked for fuel, while the power and energy sector as a whole is going to fetch Tk 9,000cr to TK 10,000cr as subsidy in the upcoming budget.
The subsidy provision for LNG has been kept in the budget as the government seeks to keep imported LNG price within the reach of ordinary consumers, official sources said, adding that 15 percent VAT imposed on LNG import might also be waived.
However, the government has increased its allocation to the sector in the proposed FY2018-19 budget. Of the total amount, Power Division will get Tk22, 000cr while the Energy and Mineral Resources Division will receive Tk3, 333cr for FY2017-18.
The budgetary allocation for the Power, Energy and Mineral Resources Ministry in the outgoing fiscal was Tk Tk21, 118cr.