Petrobangla seeks Tk 54b fiscal support to foot LNG import bill

M Azizur Rahman | Published: October 16, 2018 09:41:20 | Updated: October 17, 2018 10:12:50

The specialised vessel ‘Excellence’ reached Bangladesh on Aprril 24 last carrying 136,000 cubic metres of LNG — Collected

State-run Petrobangla has sought fiscal support worth around Tk 54 billion to purchase LNG from global suppliers during the current fiscal year until June 2019 as gas price has not been hiked yet.

"We sent a proposal to the ministry of finance (MoF) last week through the ministry of power, energy and mineral resources (MPEMR) for the fiscal support to foot LNG import bills," Petrobangla director of finance Md Towhid Hasanat Khan told the FE on Monday.

He also expressed the fear that financing the import of liquefied natural gas (LNG) might increase further as the oil and gas prices in the international market are on upswing.

"LNG import price was around US$ 10 per cubic metre when we sent the proposal, but it has already soared to around $10.50 per cubic metre," he said.

Petrobangla and its subsidiary gas marketing and distribution companies submitted proposals early this year to the energy regulator to raise blended domestic gas price for all types of consumers except households.

The Bangladesh Energy Regulatory Commission (BERC) also held public hearings over the tariff hike proposals in June.

The commission also got necessary statutory regulatory orders (SROs) issued by the National Board of Revenue (NBR) waiving a total of 122 per cent tax on the locally-produced natural gas at the consumers' end to keep the blended gas price rational.

The NBR, however, slapped 15 per cent value added tax (VAT) on imported LNG.

The NBR action came with the issuance of three regulatory orders, dated October 03, 2018, with retrospective effect from September 18.

It also waived 5.0 per cent customs duty (CD) on LNG import and slapped 2.0 per cent advance income tax (AIT).

The BERC officials had earlier said that the commission was waiting for the issuance of regulatory orders for announcing a fresh hike in gas tariff.

The commission planned to fix a new gas tariff considering blend of the imported re-gasified LNG with locally-produced gas, a senior BERC official said.

But after receiving regulatory orders, top commission officials got advice from the Prime Minister's Office (PMO), which prompted it to delay the announcement of gas price hike, insiders said.

The commission is also recalculating the new pricing mechanism after the issuance of the regulatory orders, they added.

The country has started consuming re-gasified LNG commercially since August 18.

Bangladesh received its first LNG cargo on April 24 as the US-based Excelerate Energy Bangladesh Ltd brought in its floating, storage and re-gasification unit (FSRU) carrying 136,000 cubic metres of lean LNG from Qatar's RasGas.

The BERC had earlier raised the natural gas tariff by 22.70 per cent for all types of consumers in phases with effect from March 01, 2017 and June 1, 2017 respectively.

In the latest proposals, gas distribution companies including Titas Gas Transmission and Distribution Company Ltd (TGTDCL) and Karnaphuli Gas Distribution Company Ltd (KGDCL) attempted to raise natural gas tariff to Tk 12.95 per cubic metre from the existing Tk 7.39.

They wanted to raise tariff for gas-fired power plants to Tk 10 per cubic metre from the existing Tk 3.16, for fertiliser factories to Tk 12.80 per cubic metre from the existing Tk 2.17.

The price of compressed natural gas (CNG) in the filling stations has been proposed to be hiked to Tk 48 per cubic metre from the existing Tk 40.

For the industrial sector, natural gas tariff as sought by the distributors is Tk 15 per cubic metre in place of the existing Tk 7.76.

For gas-fired captive power plants, the tariff is to hit Tk 16 per cubic metre from the existing Tk 9.62.

Gas tariff for tea gardens has been proposed to be fixed at Tk 12.80 per cubic metre from the existing Tk 7.42.

But different rights groups, including the Consumers Association of Bangladesh (CAB), protested the tariff hike move and stressed checking gas theft instead. Any increase in tariff will impose burden on the commoners, they argued.


Share if you like