After clearing all due gas bills, Petrobangla now paying on due dates

After clearing all dues on 30 April, Bangladesh has been making regular payments to different International oil, gas and LNG suppliers from 1 May. 

The country's energy bills had been piling up since the breaking out of the Russia-Ukraine war in 2022.

Sector insiders and economists attributed this development mainly to availability of dollars in the market coupled with lower liquified natural gas (LNG) price in the international markets which helped ease pressure on dollars. 

In a span of 27 days starting from 1 May, Bangladesh Oil, Gas and Mineral Corporation Petrobangla made payments worth $426.45 million regular payment to its suppliers.

Petrobangla said, after clearing all dues on 30 April, no bill has remained unpaid. 

Bangladesh had been struggling to pay due gas bills to different international oil companies (IOC), LNG suppliers and and LNG regasification companies since the Russia-Ukraine war broke out in 2022 and at one stage dues of Petrobangla hit as high as more than $1 billion.

Earlier, the persistent dollar crisis and high LNG price in the international market eroded the financial health of Petrobangla, affecting its ability to clear the import bills of LNG and local gas bills.

"It took three straight years to bring stability in the payment system. Since 1 May, we are continuing to make regular payments to our clients," said AKM Mizanur Rahman, director (finance) of Petrobangla.

The interim government started its journey on 8 August, 2024 with a whopping $675.76 million unpaid gas bills owed by International oil and gas companies and LNG suppliers.

In less than nine months, all dues were cleared on 30 April. 

How much money was paid to whom

Of the $426.45 million paid between 1 May to 27 May,  two local IOCs – Chevron and Tullow – received $1.15 million.

Two long term LNG suppliers– Qatar Energy and OQ Trading Ltd received $155.22 million where QatarEnergy alone got $125.18 million and the rest, $30.04 million, was paid to OQ Trading Ltd.

Three spot LNG suppliers – TotalEnergies, Vitol Asia Pte Ltd and Gunvor Singapore – together received $254.58 million.

Of the amount, TotalEnergies received the largest amount of $194.13 million, Vitol Asia received $20.35 million and Gunvor Singapore received $40.10 million. 

On the other hand, two LNG regasification companies – Excelerate Energy and Summit – received  $15.50 million.

Of the amount, Excelerate Energy received $7.82 million and Summit received $7.68 million. 

Speaking to the Business Standard, former World Bank lead economist in the Bangladesh chapter Dr Zahid Hussain attributed the easing of the payment system to availability of dollars in the market.

He said "Bangladesh was unable to pay dues in the past due to dollar shortage. Availability of dollars in the market made the job of paying bills to gas suppliers easier. Low price of LNG in the international market also played a role in paying regular bills."