Petrobangla has to return Tk 12,227cr
Bangladesh Energy Regulatory Commission in the verdict of a public hearing has ordered the Petrobangla to return Tk 12,227 crore taken from its security and development funds.
The state-owned oil company took Tk 9,227 crore from its Energy Security Fund to import liquefied natural gas from the international market. It also deposited in the exchequer Tk 3,000 crore from the Gas Development Fund as surplus money.
The public hearing on gas price adjustment was held on March 21-24 where a consumer rights body, energy experts and political leaders demanded refund of the money. They said it is a misuse of public money as it is not the income of Petrobangla.
The verdict was released on Monday.
Consumers Association of Bangladesh (CAB) representative Prof M Shamsul Alam at the hearing said the funds operated by the Petrobangla without any concern of BERC is a "conflict of interest".
The Petrobangla didn't mention separately how much gas they imported from the spot market and how much under long-term agreements. "With the gap between the figures, it created the scope of misappropriation of the money," he added.
But the Petrobangla representative didn't agree with the arguments. AKM Benjamin Riazi, director (finance) of the company, claimed they had no surplus money for the LNG import purpose.
However, the BERC's Technical Evaluation Committee found that from August 2018 to June 2021, Petrobangla's expenditure for LNG import stood at Tk 47,214 crore while it generated Tk 49,752 crore for this purpose, leaving a surplus of Tk 2,538 crore.
According to the verdict, Petrobangla in fiscal 2019-20 and 2020-21 imported 558 mmcfd and 589 mmcfd (million cubic feet daily) of gas on an average respectively. The import estimation was 850 mmcfd in the 2019 gas pricing order of BERC.
The commission said Petrobangla also imported LNG at less than the projected cost, and the total distribution cost at consumer level decreased by Tk 7,284 crore and Tk 7,648 crore respectively.
"Compared to the LNG import cost till June 30, 2021, the Petrobangla's LNG charges and related income were higher and that's why it should return the money taken from the Energy Security Fund," said the order.
Besides, the BERC ordered refunding the Gas Development Fund's Tk 3,000 crore, which was deposited with the government treasury as surplus money of Petrobangla. The return has to be with interest.
The company took Tk 12,227 crore from the two funds since 2018 till June 30, 2021.
In January 2020, parliament passed the Deposit of Surplus Funds of Autonomous, Semi-Autonomous, State-Owned, and Public Non-Financial Corporations into the Government Treasury Act.
Under this act, Petrobangla deposited Tk 5,871 crore with the government treasury. Of that amount, Tk 3,000 crore was collected from the consumers for GDF.
The fund was created by an order of BERC in July 2009.
In 2019, a portion of the tariff paid by the consumers was being kept for this fund and the government has regulations where the money could be spent.
According to the GDF regulations of 2012, the money could only be spent by lending it for gas exploration and development works related to production increase.
Mentioning it, the BERC wrote to the Petrobangla several times asking for return of the money but to no avail.
Monday's verdict said reports on projects undertaken with money from the GDF, the project progress and their benefits should be sent to the BERC every six months.
It also asked for monthly reports on the gas production and costs, import and costs, taxes and VAT paid by the Petrobangla.