Govt offices see sharp rise in fuel expenses amid power austerity

The government directive to all of its offices to cut the energy budget by 20% as part of its power austerity measures – aimed at saving foreign currencies by reducing fuel imports – appears to have had little effect, with fuel consumption at different public offices marking a sharp rise in recent months.

Take the Rangpur branch of the Bangladesh Bank, for example. The office saw its expenditure on fuel oil go up by a whopping 718% to Tk1.31 lakh in July from a rather paltry Tk16,000 in the previous month.

This abrupt rise in fuel consumption, according to officials concerned, was because of a 20-fold increase in the use of the backup power generator at the office in July, as compared to June, owing to frequent power cuts.

The same is the case with the National Institute of Biotechnology (NIB) under the Ministry of Science and Technology.

The institute authorities have said the generator at the office has to be run for an average of three hours a day during office hours, which requires 105 litres of diesel per day.

To meet this additional diesel expenditure, the science and technology ministry has asked for an additional allocation of Tk37 lakh from the budget for the current fiscal year.

Likewise, the food ministry has written to the finance ministry seeking an additional allocation of Tk1 crore in the petrol, oil, and lubricant sector for the Directorate General of Food. In this case, however, the extra allocation has been sought on the ground that the need for officials to travel to different districts has increased in the interest of a successful implementation of food-friendly programmes across the country.

According to people concerned, apart from frequent power cuts, a hike in fuel prices in July this year has also contributed to the sharp increase in various institutions' expenditures on fuel oil.

In this situation, various ministries and agencies are seeking permission to spend 100% of the budgetary allocation on fuel as well as requesting the finance ministry to allocate additional money to meet their energy expenditure.

In a circular issued on 21 July this year, the finance ministry directed all government offices to spend a maximum of 80% of the allocation in the petrol, oil, and lubricant sector energy budget for the current financial year. But a number of organisations are now demanding the withdrawal of the directive.

An official of the finance ministry, on condition of anonymity, told The Business Standard that all government, semi-government, and autonomous institutions have been instructed to save 20% of the allocation in the energy sector in view of the decision of the Prime Minister's Office, as part of austerity in government expenditure.

"Even then, many institutions are asking for additional allocation besides seeking withdrawal of the government directive to reduce fuel consumption, which is not desirable at all," the official said.

The official, however, told TBS that the finance ministry will review the applications on a case-by-case basis and then make a decision on whether additional allocation will be given.

The science and technology ministry in its letter to the Finance Division's Senior Secretary Fatima Yasmin said research and other activities of the National Institute of Biotechnology – the country's lone specialised research institute on biotechnology – are being severely disrupted due to about three hours of load-shedding per day. Due to frequent power outages during office hours, no research project can be completed properly and valuable pieces of equipment are getting damaged, it added.

"In the current situation, if it is possible to ensure uninterrupted power supply through a backup power generator for 3-4 hours, it will be possible to continue research activities," said the ministry.

According to the Ministry of Science and Technology, the biotechnology institute has an allocation of Tk6 lakh for petrol, oil, and lubricant in the current financial year, out of which Tk5 lakh can be spent on the purchase of diesel for the generator. But if load shedding occurs for three hours per day, about 70 hours of load shedding take place per month, which requires 2,450 litres of diesel. As such, Tk3.52 lakh is required for the purchase of diesel for the generator per month, and the figure amounts to Tk42.33 lakh for the entire year.

Therefore, the science ministry has requested the finance ministry to allocate an additional Tk37.33 lakh to the biotechnology institute for buying diesel.

Meanwhile, the food ministry in its letter sent to the finance ministry on 2 October said Tk45 lakh has been allocated in the petrol, oil, and lubricant sector for the current fiscal year for administrative and other activities of the head office of the food directorate.

"If the energy budget is slashed by 20% as per the finance ministry circular, the actual allocation stands at Tk36 lakhs. With the price of fuel increasing by 1.4 times, this sum will be enough to buy a maximum of 100 litres of diesel or octane per month, with which it will not be possible to carry out large-scale operations, such as the ongoing food-friendly programmes of the government."

In this situation, the food ministry has requested the finance ministry to allocate an additional Tk1 crore for the food directorate in the current financial year, besides giving it permission to spend 100% of the total allocation for petrol, oil, and lubricant.

The Khulna divisional commissioner's office also has written to the secretary of the Local Government Division seeking additional allocation for energy.

Apart from this, the police headquarters has asked for an additional allocation of around Tk205 crore in the energy sector for the fiscal year along with permission to spend 100% of the allocation for fuel oil. It also has asked for an allocation of Tk226 crore for buying new cars.

An increase in police mobility because of a surge in political programmes ahead of the forthcoming 12th national parliamentary election, promotion and posting of officers against newly created posts, and an increase in the number of motor vehicles have led to a rise in fuel expenditure, said the police headquarters.