PDB seeks TK5,500cr as subsidy for next FY

The Power Development Board (PDB) has sought Tk5,500 crore as subsidy from the Finance Ministry for the next fiscal year (2017-2018) to run its power projects, according to officials at the Power Division.
The PDB received Tk1674.09 crore as subsidy in July and October last year while another chunk of Tk370.51 crore was in the pipeline.
However, the Bangladesh Petroleum Corporation (BPC) did not seek any subsidy as fuel price has marked a drastic fall in global market, which has remained stable for the last few years, according to the Energy Division.
Subsidies in the power sector are soaring day by day. It increased to Tk2, 474 crore in the first eight months of the current 2016-17 fiscal due to gradual rise in electricity purchase from costly rental and quick rental power plants.
Besides, the electricity import from India has also been increased.
"During the July-October period of the current fiscal, the government has incurred losses of Tk1674.09 crore for selling electricity purchased from the private sector at subsidized rates and Tk120 crore for paying higher rates for the 600MW power import from the Indian state of Tripura," a senior official of the Power Division told the Daily Observer.
"The subsidy will continue as the government plans to minimize the loss of state-owned PDB through giving direct subsidy to the power sector so that it would not impact tariff," a senior official at the Power Division said, preferring anonymity.
According to the Finance Ministry, in the last five years it has given TK 6000-7200 crore for the Power Division to run the high-cost liquid fuel-based power plants.
According to the PDB, it needs the amount to generate power, distribute it to consumers and meet all other expenses, including the salaries of its officials and staff.
According to the Power Ministry and the Bangladesh Petroleum Corporation (BPC), the power sector needs nearly 24 lakh metric tonnes of liquid fuel to generate power from fuel-based power plants.
A source in the Finance Ministry said they can allocate Tk5, 400 crore as a subsidy to generate 3500 MW of electricity from liquid fuel-based power plants. However, of the 3500MW, 600MW to 700MW have to be produced from the PDB-run plants.
Meanwhile, State Minister for Power Nasrul Hamid on Monday said power subsidy will be completely withdrawn from the year 2022-23 as electricity will become more affordable by the commissioning of base-load power plants.
The Bangladesh Power Development Board (PDB) purchased around 2195MW of electricity from 20 rental and quick rental power plants only in January and February, which was 542 MW higher compared to the same period a year ago.
Power purchase from the private sector reached around 6,021MW in the first two months of the current calendar year owing to a fall in electricity generation from low-cost state-run plants. PDB produced around 1800MW of electricity from gas-fired public-sector plants during the period.   
Power tariff from the state-run power plants ranges between Tk2.0-3.5 per unit, but it costs between Tk13 and Tk23 per unit from the oil-fired rental plants.
In January and February in the current year, the government incurred losses of Tk429.40 crore for selling electricity at subsidised rates largely due to costly power purchase from the rental, quick rental plants and power import from India.
The PDB paid Tk32.90 crore and Tk365.07 in bills to the rental power plants and quick rental plants respectively in November and December.
The losses for selling electricity at subsidised rates stood at Tk1003.02 crore in July and August and Tk718.79 crore in September and October year, according to the Power Development Board.