Fuel imports to rise, pushed by power plants
The government is set to import 15 lakh tonnes of petroleum products in six months, which is 22 percent of the target for the current fiscal year.
The proposal for procuring the products at a cost of Tk 10,436 crore is due to be placed today at a meeting of the cabinet committee on public purchase.
The total petroleum imports this year will be 71 lakh tonnes, up from the previous fiscal year's 63.93 lakh tonnes, which, an official from the energy ministry said, is due to an increase in the number of oil-based power plants to meet the rising demand for power. The remaining 56 lakh tonnes will be procured toward the latter half of the fiscal year, when the boro season is on way, the official said.
Of the 15 lakh tonnes to be imported, 10.28 lakh tonnes are diesel, 2.6 lakh tonnes furnace oil and the rest kerosene and jet fuel, as per the proposal from the energy ministry proposal.
The products will be imported from the Philippines, China, Malaysia, Kuwait, United Arab Emirates, Egypt and Indonesia on state-level arrangements.
Meanwhile, the International Monetary Fund (IMF) found that much petroleum was wasted between their import and actual use and asked the government to conduct a detailed audit to prevent the misuse.
Accordingly, the government recently conducted an audit on state-run Bangladesh Petroleum Corporation, the sole oil importer, where it identified loopholes in management, supply and distribution of petroleum products.
The irregularities cost the country a huge sum by way of revenue loss, damage and wastage of subsidies.
A finance ministry official said the total fuel import was around 32-36 lakh tonnes about five years ago. “As the oil-based power plants increased, petroleum imports increased -- and so did the subsidies.”
Power generation from oil-based power plants doubled in the last three years to about 1,800-2,000 megawatts, according to data from the Power Development Board. Last fiscal year, the fuel subsidies amounted to Tk 15,230 crore.
Although the government has cut the subsidy amount by half in the current budget to Tk 8,000 crore approximately, officials say it would not be possible to keep the amount within the target.
At present, Bangladesh produces at least 27 percent of its 6,600 megawatt of electricity from import-based petroleum sources, according to Power Development Board.