The government in this part of the world, traditionally, is a bad manager. It has proved itself to be a bad accountant too, at least, in the matters of determining the power tariff.
The government is forcing a section of liquid fuel-based private and public power producers to buy diesel and furnace oil at prices much higher than that prevailing in the international market with a view to helping the state-owned Bangladesh Petroleum Corporation (BPC) to earn hefty profit. At the same time it has been providing subsidy from the state coffer to the Power Development Board (PDB) for buying power from those units.
But the government is victimising the power subscribers in its meaningless exercise of selling oil at higher prices and buying power also at high prices. The PDB and other power distribution companies with a view to reducing their 'loss' at frequent intervals tend to hike power rates at the cost of power subscribers.
A leading Bengali contemporary in a front-page report, published last Tuesday, disclosed a piece of information that the Power Development Board (PDB) and the state-owned power distribution companies have submitted separate proposals to the energy sector regulator for a fresh hike in power tariff.
The submission of power rate hike proposal, according to many, at this point of time is nothing but a cruel joke with the power subscribers, particularly when the fuel oil prices have declined to an unbelievably low level.
In fact, there is no plausible reason for the liquid fuel-based power companies to incur loss under the prevailing international market prices of fuel oils. What has transpired from the information given in the newspaper report mentioned above is that a good number of rental and quick rental power plants based on furnace oil are being forced to buy furnace oil from the BPC at a high price, Tk. 62 a litre. But the cost of the same fuel comes at around Tk. 25 in the case of 11 rental power plants that have been allowed to import furnace oil on their own.
The cost of production of a unit of electricity by the two groups of plants varies widely -- less than Tk. 6.0 for the plants importing the fuel themselves and about Tk. 15 in the case of those dependent on local supply. The PDB is to buy power from both groups according to their cost of generation plus some profit.
The volume of subsidy to the power sector would be far less this year because of the availability of nearly 1000 megawatts of power at lesser cost. Had all the rental plants been allowed to use fuels having their prices in line with that of international market, the government would not have been required to spend that much of money as subsidy.
The government's real intention about revising the domestic fuel oil prices is still unclear. Though communications between energy and finance ministries have been on for quite sometime, none is sure about the actual outcome. If any downward adjustment is made, it could be nominal one, it is widely suspected.
The apparent refusal on the part of the government not to pass on the benefit of substantial decline in fuel oil prices in the internal market and, on the contrary, move taken to increase power tariff afresh are unlikely to go well with the people in general and business in particular.
Even the government leaders do not dispute the fact that the cost of doing business in Bangladesh is high. They on most occasions put emphasis on reducing this. But when the ball comes to their own turf, they prefer to remain pretty indifferent.
But experts' observation is that the downward revision of domestic fuel oil prices would help spur economic growth of the country. But the government, seemingly, is more concerned about getting back the money it had paid to the BPC to procure fuels. However, there is dispute between ministry of finance and the BPC over the nature of that money. The BPC considers it as subsidy and the MoF loan.
The BPC has already recovered all the losses it has incurred in the past at the cost of consumers. Intransigence has played its part in this 'great' achievement. When the BPC was selling fuel oils at prices much lower than the prevailing international prices, the International Monetary Fund (IMF) advised it to go for an automatic price adjustment method. It did not comply with, for, such compliance would hurt the consumers' interest. In a reverse price situation, the IMF has given the same advice. But the government is not complying with, for, it would benefit the consumers! Bhodro loker ek kotha (It is gentleman's word)
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