Global spread of the coronavirus pandemic and subsequent fall in liquefied natural gas (LNG) prices in international market turned to be a 'boon' for the state-run Petrobangla.
Like another major fuel importer - the Bangladesh Petroleum Corporation (BPC), the Petrobangla's fuel import costs dropped drastically. It happened, as LNG price fell below US$5.0 per million British thermal unit (mmBtu) as a consequence of the outbreak. It is half of the price, at which the Petrobangla imported the fuel one year back.
The BPC's profit climbs over Tk 250 million a day with the spread of coronavirus pandemic.
Officials said the Petrobangla has been importing lean LNG under long-term deal since April 2018. Had the entity imported LNG from spot market, the cost would have been almost half the current import cost, they added.
LNG price in international spot market dropped to all-time low of $2.71 per MMBtu last month, keeping pace with sharp fall in all sorts of energy prices including petroleum oil.
Both the BPC and the Petrobangla are on sound fiscal footing now, riding on the steepest fall of energy prices in international market.
If the viral infection epidemic continues, the Petrobangla's fuel import cost is expected to fall further, and the BPC's profit may make a quantum leap.
But the country's energy consumers are unlikely to get any benefit of the record low price.
When contacted, the BPC Chairman Shamsur Rahman ruled out the possibility of slashing domestic oil prices.
"Fixing the oil price is a policy issue by the government's high-ups. They will decide about it, if necessary," he added.
The price of brent crude, the benchmark in international oil price, now hovers at around $ 27 per barrel as on March 27, which was over $70 per barrel on January 07, in the regular futures market.
The Petrobangla is also unwilling to slash down gas prices for consumers, as it sees that LNG import cost is still higher than the locally produced gas, although the 'actual price' of locally produced gas is not yet calculated, said a senior official.
The government, however, may be benefitted by not providing subsidy to the Petrobangla due to the price fall of LNG.
The Bangladesh Energy Regulatory Commission (BERC) hiked natural gas tariff for its consumers by 32.8 per cent on an average from July 01 of the current fiscal year (FY), 2019-20.
The government through an executive order on April 24, 2016, fixed the oil prices, and since then the prices have remained unchanged.
From March 1, 2020, the BERC raised the average retail level electricity tariff by 5.3 per cent, or Tk 0.36, to Tk 7.13 per unit (1 kilowatt-hour) from Tk 6.77 per unit.
The commission also increased the bulk or wholesale level electricity tariff by 8.40 per cent, or Tk 0.40, to Tk 5.17 per unit from Tk 4.77 per unit on an average from the current month.
Meanwhile, the Consumers Association of Bangladesh (CAB) sought a review in tariffs of electricity and natural gas to pass through the benefit of energy price fall to consumers.
The CAB Energy Adviser Professor M Shamsul Alam demanded a review in natural gas and electricity prices by the energy regulator to ensure their fair prices in domestic market.
"It is unfortunate that consumers are being deprived of their rights of getting natural gas and electricity at logical and reasonable prices despite the drastic fall in fuel prices in international market," he told the FE on Sunday.
Mr Alam was also critical over the recent electricity tariff hike, which came into effect from March 01, as the energy prices were on downtrend when the tariff hike announcement came on February 27.
Instead of adjusting energy prices downward and offering consumers a sigh of relief, the government is letting the state-owned entities to make hefty profits, he lamented.
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