It is not possible to provide a subsidy of Tk. 32 thousand crore for electricity: Adviser
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Photo: Collected
A total of Tk. 52 thousand crore is being provided as subsidy in the electricity and energy sectors, the per capita subsidy is Tk. 3 thousand. It is not possible to provide a subsidy of Tk. 32 thousand crore in the electricity sector annually, said Adviser on Power, Energy and Mineral Resources Dr. Fawzul Kabir Khan.
He made this comment at a seminar on fuel prices and supply assurance at the DCCI Auditorium on Saturday (December 7).
He also said, we are selling electricity at an average rate of Tk. 8.95 per unit, and buying it from Tk. 12 to Tk. 25. Why was it bought at a higher price, which made the contract, why did they do it! Businessmen who have done business in Bangladesh, didn't they think, why are we charging such a high price, will they compensate the nation.
He said, it is not possible to provide a subsidy of Tk. 32 thousand crore for electricity, the old idea is that IPP power plants will not be built anymore. We are moving towards merchant power plants, you will build the power plants yourself, you will decide the customers and the price yourself, you just have to inform BERC. There will be an option to buy 10-20 percent from the government, so that there is no financial risk.
Competition has been banished; you were introduced to that and got the power plant. Now that opportunity is gone, there will be no purchase without an open tender. We have already started reaping the benefits of it. Earlier, only four or five companies used to participate in BPC's imports, earlier the condition was to have a refinery, the condition has been relaxed and it has been said that it will be only for large suppliers. We are getting 12 people instead of four or five people, which have saved 32 percent. We have opened up LNG. They were left in a suffocating state with closed windows and doors, we have opened everything, if you are a good businessman, you will be able to do business here. There will be no need for any introductions here, he commented.
He said, currently the daily demand for gas is about 4 thousand million cubic feet, we are supplying less than 3 thousand. There is a deficit of about 1 thousand here. There is surplus gas in Bhola, only one company was given to convert it into CNG. We will open it up; from there you can convert it into CNG or LNG. Tenders will be floated for 40 solar power projects in phases. There is a lot of waste land of various government agencies. We will provide land, line it, you just come and do the project.
Regarding strengthening oil and gas exploration, he said, 48 well drilling projects are underway. 100 more will be done in the next 2 years. Expressing some regret over bureaucratic complications, he said, I was once a bureaucrat, now I have to fight with my own shadow. If it exceeds a certain amount, a third-party consultant will have to be appointed, which will take 1 year. However, the third party has no information. I have given a semi-official letter, Petrobangla will do it itself. That saves us money and time. He also called on businessmen to raise their voices here.
The adviser said, you are making allegations against the ministry, your allegations are true, the ministry has failed to do the work. We have to make arrangements so that we cannot say these things when we meet again.
DCCI President Ashraf Ahmed said, if we need energy, then there is no alternative to import, price dependence, I can ensure its economical use. Along with imports, we have to increase the use of our own resources. We are able to use a small amount of the potential of coal resources and solar power. We need to consider how appropriate the use of gas for fertilizer production is, there are many alternatives to gas in fertilizer production, we should go in that direction.
Energy expert Dr. M. Tamim presented the key-note paper and said, it is not possible to dictate the price of energy in any way, the price of energy has never been right in the long term. The cost of generating electricity per unit (2023-24) is Tk. 11.51, and it is being sold (wholesale) at Tk.7.02. Again, there is a shortage in gas prices. A sector cannot run with such a shortage. Due to the increase in the price of the dollar alone, the price of coal-based electricity per unit has increased from Tk. 6.5 to Tk. 9.17.
Dr. M. Tamim said in his recommendation that the price of electricity coming from India other than Adani is much lower. The average cost of coal-based power plants produced in Bangladesh is Tk. 12.46 and at the same time Adani has to pay Tk. 14.83 taka. Why will it cost more, that agreement should be reviewed? The average price of solar power is Tk. 16.48, those agreements also need to be reviewed.
To reduce load shedding of electricity, change office hours and close the market by 7 pm during the summer, if necessary, run until late on Fridays and Saturdays. Export boosted electricity to Nepal in winter. Work jointly with foreign companies on land to meet the gas crisis, reduce gas system losses.
He said that the gas crisis could become more pronounced. Preparations should be made for this. More FSRUs will be needed.
Energy expert Dr. Badrul Imam said that there is no shortage of gas here, if proper exploration was done, we would not have to talk about the gas crisis today. But unfortunately, no government has done any intensive exploration activities. We have always focused on imports. I can guarantee that if we had worked that way, we could have moved towards gas exports.
Energy expert Dr. Ijaz Hossain, President of Bangladesh Solar and Renewable Energy Association Engineer Nurul Akhter, Vice Chairman of Confidence Group Imran Karim, among others, spoke at the seminar organized by Dhaka Chamber of Commerce and Industries (DCCI).
