State-run Petrobangla has received subsidies worth Tk 10 billion from the government to foot LNG import bills, its first since purchase started.
The amount of subsidy is, however, around one-third of Petrobangls's requirement for the payment against import of liquefied natural gas, the corporation's director for finance Harun-or-Rashid told the FE Sunday.
Despite the subsidies, Petrobangla was running deficit by around Tk 30 billion until March 2019, he said.
Petrobangla has been purchasing piped gas from different upstream gas production companies at an average rate of about Tk 6.50 per cubic meter, while each unit of LNG costs around Tk 38 per unit, he said.
In October 2018, Petrobangla had sought Tk 54 billion as fiscal support from the ministry of finance (MoF) for LNG import during fiscal year 2018-2019.
The Finance Ministry, however, asked Petrobangla to introduce enterprise resource planning (ERP), an automated software, to ensure transparency and accountability in Petrobangla's transactions, to get such payment in future.
Corporation officials said the introduction of ERP software requires need assessment and it would be time-consuming as it has half a dozen subsidiary firms.
The country has started consuming re-gasified LNG commercially since August 18.
Petrobangla received its first LNG cargo on April 24 as the US-based Excelerate Energy brought in its floating, storage and re-gasification unit (FSRU) carrying around 136,000 cubic metres of lean LNG from Qatar's RasGas.
Currently it has been re-gasifying around 510 million cubic feet per day (mmcfd) equivalent of LNG through the maiden operational FSRU, known as -Excellence.
It has been importing LNG from Qatar's RasGas and Oman's Oman Trading International (OTI).
Petrobangla's LNG import is expected to go up soon as the country's second FSRU owned by local Summit Group is expected to be commissioned by April this year.
Like Excelerate's Excellence, Summit's FSRU has the similar capacity to re-gasify around 500 mmcfd of LNG.
Petrobangla and its subsidiary gas marketing and distribution companies, however, have been trying to raise domestic gas price for all types of consumers to foot LNG import bills over the past one and a half years.
In early 2018, the corporation proposed the Bangladesh Energy Regulatory Commission (BERC) to raise domestic gas price for all types of consumers, except households.
But the Commission then turned down the proposals, keeping the natural gas tariff unchanged as the volume of LNG imports then was less-than-expected.
During most of 2018, Petrobangla was re-gasifying around 300 mmcfd of LNG.
But the company along with its subsidiary gas companies had sought a hike in natural gas tariff calculating LNG imports to the tune of 1,000 mmcfd, or over three-times that level, a senior BERC official said, citing the reason for not hiking the natural gas tariff.
Petrobangla and its subsidiary gas marketing and distribution companies sought again a hike in gas tariff by 102.85 per cent on an average in their latest proposals of March 6, 2019 to foot LNG import bills calculating their costs with doubling LNG imports from the current level.
The Commission concluded public hearing on March 14 and a decision is pending within 90 days after completion of the hearing.
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