PDB needs Tk700cr extra to run oil-based power plants

Bangladesh Power Development Board (BPDB) needs Tk 700 crore extra as subsidy to run its 1200 MW liquid fuel based power plants along with its Tk7,000 crore regular subsidy.
"Following the recent fuel price hike, we have prepared a proposal, which will be forwarded to the Finance Ministry within a few days," a senior official of the state-owned power generation authority told the Daily Observer on Monday.
Oil-based power plants account for 28 percent of country's power generation capacity. About 46 plants (liquid fuel based) can produce 3,676MW power. Of it BPDB-owned plants' capacity is around 1200MW.
The PDB has been incurring a loss of around Tk 20 crore per month for the last three months for meeting up the fuel bills. Following the recent fuel price hike it
needs to pay around TK 60 crore every day, official said.
Private power producers are enjoying a tax holiday on oil imports while the government buys power from them at a higher rate. According to BPC figures, it sold 1.6 million tonnes of oil to power plants in fiscal 2019-20.
Earlier, PDB sought TK 8,000 crore-Tk 9,000 crore as a subsidy to minimize the loss of the state-owned organization for the Fiscal year 2021-2022.
In fact, the PDB sought the money from the Power Division as subsidy, calculating its losses up to June 2022. However, the global upsurge in fuel price shattered its plan.
 "A proposal for a tax break to PDB, like the private producers, has been forwarded to the National Board of Revenue or NBR, but they are yet to respond," PDB official said.
PDB needs a tax break to import oil for its power plants like private producers.
However, the PDB has to pay 18 percent VAT and a 40-cent tariff on per barrel oil it procures.
Last year Power Development Board sought Tk 7,500 crore as subsidy from the Finance Ministry but in the upcoming year it needs TK 1000 crore more as it (PDB) needs to pay a huge amount of money to the private producer as 'Capacity payment'.