Bangladesh spends Tk 262.15bn subsidies for LNG in 6 years

The government has spent Tk 262.15 billion on subsidies for liquefied natural gas-LNG imports in six years, State Minister for Power, Energy and Mineral Resources Nasrul Hamid has said.

Nasrul revealed the year-wise information on subsidies for LNG in his reply to Dhaka-8 MP AFM Bahauddin Nashim’s question in parliament on Thursday.

The government has been giving subsidies to this sector since the beginning of LNG import in the fiscal year 2018-19, the state minister said.

The annual spending on subsidies for LNG is as follows:

• 2018-19: Tk 25 billion

• 2019-20: Tk 35 billion

• 2020-21: Tk 24 billion

• 2021-22: Tk 60 billion

• 2022-23: Tk 63.15 billion

• 2023-24: Tk 55 billion

The government has spent Tk 318.33 billion on subsidies for the power sector in the 2023-24 fiscal year against an allocation of Tk 350 billion, according to Nasrul.

Out of this, Tk 117 billion has been given in cash and Tk 201.33 billion has been adjusted through bonds.

The gas sector needs Tk 65 billion in subsidies this fiscal year, the state minister said.

He said Bangladesh Petroleum Corporation or BPC faced continuous losses from 1999-2000 to 2013-14 financial year.

At that time the government had to give a substantial amount of subsidy to the energy sector.

However, the government did not have to pay any subsidy for fuel oil from November 2014 to the fiscal year 2022-23 due to a price fall in the international market.

However, in the financial year 2021-22, due to the global crisis caused by the Ukraine-Russia war, when the price of fuel oil increased in the international market, BPC suffered a loss of over Tk 27 billion.

As long as the price of fuel oil in the country is currently adjusted in line with the international market in the Dynamic Pricing Formula, no subsidy has to be paid in this sector now, he added.

In reply to another query from Habiganj-1 MP Amatul Kibria Keya Chowdhury, Nasrul said Bangladesh is currently producing 1,312 megawatts of electricity from renewable sources.

Once all the ongoing and planned projects are completed, the country will get 12,547 megawatts of power from renewables, according to him.

This amount of power from renewables is expected to be added to the national grid by 2030.