Proposed budget provides no relief from soaring energy prices: CPD

The proposed budget does not assure any relief to consumers from soaring energy prices, observed Centre for Policy Dialogue (CPD) experts at a dialogue on Sunday.

Analysing the Energy and Power Sector allocation in the National Budget, CPD's Research Director Khondaker Golam Moazzem said keeping imported LNG in the energy-mix would raise the cost pressure further to the consumers.

The price per MMBtu (Metric Million British Thermal Unit) imported LNG is $35 while the same volume of locally sourced gas is priced at only $2.

At present Bangladesh consumes around 3,000 mmcf gas per day, though the demand is above 3600mmcf.

Meanwhile, energy experts suggested that the government should focus on domestic energy production by reducing its dependence on imported energy.

They said as always, in the proposed budget for fiscal year 2022-23, importance has been given to electricity, leaving the issue of gas production.

Khondaker Golam Moazzem said the power and energy sector is in a fiscal pressure due to rise in import cost of petroleum and LNG and coal.

He said it was expected that the national budget for FY23 will take into consideration some issues like adjustment of the capacity payment, fiscal allocation to accommodate required subsidy and emphasising on domestic gas exploration to meet the gas shortage.

"But the proposed budget has systematically ignored the exploration of domestic gas to meet the gas shortage and initiatives to reduce excess power capacity which further worsened the situation," he said.

Moazzem added that an energy-mix with renewable energy could be a possible option which has been ignored systematically.

Professor Badrul Imam of the Department of Geology at Dhaka University said "If we consider the power and energy division separately, we will see a success story in the power sector."

"But on the other hand, energy which is required for power generation, has no success story," said Professor Imam.  

We always see that the major part of the budget allocation for the power and energy sector goes to the power sector and the energy sector remains ignored.

"But the energy sector should get priority and broader focus. Otherwise, a big part of power generation capacity would not be utilised and increase the overcapacity burden, he said.

"To reduce the financial burden of overcapacity and keep the energy affordable, we need to have primary fuel from our own source which we geologists believe has huge potential," added Badrul Imam.

As per BPDB Annual Reports, in FY2018, the share of overcapacity was only 31.31% which has jumped to 42.12% in FY22.

Meanwhile, the Bangladesh Power Development Board's expenditure for capacity payment to private and public power plants owners reached Tk26,533crore (estimated) from Tk5600 Crore in the same period.

Professor Mohammad Tamim of Buet's Department of Petroleum and Mineral Resources Engineering, said the problem is in the energy sector which has remained neglected in the budgets for years.

Professor Tamim said this is high time to look into primary energy supply by exploring new gas fields.

Professor M Shamsul Alam, dean, Faculty of Engineering (FE), Daffodil International University said the subsidy that is provided to power and gas is a predatory cost.

He said, "Each year, the government takes around Tk10,000 crores to Tk14,000 crores from energy sector companies which is their surplus money after all operational costs. If an entity gets a subsidy how does it have surplus money?" 

Speaking as the special guest, Mohammad Hossain, director general, Power Cell, Power Division, Ministry of Power, Energy and Mineral Resources said that due to lack of gas, we have to generate electricity with other fuels.

"If there were no oil-fired power plants, there would be a lot of load shedding because we don't have other options," he said.

Among others, Imran Karim, president, Bangladesh Independent Power Producers' Association (BIPPA) spoke at the dialogue chaired and moderated by Dr Fahmida Khatun, executive director of CPD.