Policy on gas development fund utilisation soon
Thursday, 11 November 2010
M Azizur Rahman
Bangladesh Energy Regulatory Commission (BERC) is preparing a policy on proper utilisation of a gas development fund worth Tk10 billion lying idle for over a year, official sources said.
"We are now giving final shape to a draft of the policy to ensure that the fund is utilised properly for development of the country's energy sector," BERC Chairman Syed Yusuf Hossain told the FE Wednesday.
He said as per the draft of the policy the commission will monitor overall expenditure to check misuse of the fund.
The fund has been created from gas sales since June 2009 after the commission asked Petrobangla to create the fund while raising gas tariff by 10 to 15 per cent in November 2008.
Entire money realised from enhanced gas tariff has been earmarked for the fund, which is increasing at least by Tk 7.0 billion a year.
The fund will be used for upstream development purposes, especially natural gas exploration, production and transmission.
State-owned Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) and Gas Transmission Company Ltd (GTCL) will get money from the fund to carry out the necessary development activities for gas exploration, production and transmission.
Prior permission from the parent state-owned energy entity - Petrobangla - will be required for spending the fund's money, the draft of the policy spells out.
Under no circumstances the state-owned entities will be able to extract any amount of money as dividends or operating income from fund.
Officials said creation of the gas development fund was necessary to undertake oil and gas exploration activities.
Energy experts suggested that the money should be provided to gas development and production companies, including the Bangladesh Gas Fields Company Ltd (BGFCL) and Sylhet Gas Fields Company Ltd (SFGCL), for proper development of the energy sector.
"The government should judiciously select the company and projects for spending the public money," said Professor M Tamim of Bangladesh University of Engineering and Technology.
It should constitute a committee comprising experts and professionals to scrutinise the proposals from state-owned gas entities, he said.
"Currently, the BAPEX do not require much money as we have allocated Tk 35 billion only for BAPEX to carry out its necessary works," said Professor Tamim, who was a special aide to the Chief Adviser of the previous caretaker government.
Petrobangla officials said due to insufficient fund allocation to the local companies their shares in the country's total gas output fell drastically over the past years compared to those of the international oil companies (IOCs).
In 2004, local companies shared around 76 per cent of the total gas output, whereas the IOCs only 24 per cent.
Bangladesh Energy Regulatory Commission (BERC) is preparing a policy on proper utilisation of a gas development fund worth Tk10 billion lying idle for over a year, official sources said.
"We are now giving final shape to a draft of the policy to ensure that the fund is utilised properly for development of the country's energy sector," BERC Chairman Syed Yusuf Hossain told the FE Wednesday.
He said as per the draft of the policy the commission will monitor overall expenditure to check misuse of the fund.
The fund has been created from gas sales since June 2009 after the commission asked Petrobangla to create the fund while raising gas tariff by 10 to 15 per cent in November 2008.
Entire money realised from enhanced gas tariff has been earmarked for the fund, which is increasing at least by Tk 7.0 billion a year.
The fund will be used for upstream development purposes, especially natural gas exploration, production and transmission.
State-owned Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) and Gas Transmission Company Ltd (GTCL) will get money from the fund to carry out the necessary development activities for gas exploration, production and transmission.
Prior permission from the parent state-owned energy entity - Petrobangla - will be required for spending the fund's money, the draft of the policy spells out.
Under no circumstances the state-owned entities will be able to extract any amount of money as dividends or operating income from fund.
Officials said creation of the gas development fund was necessary to undertake oil and gas exploration activities.
Energy experts suggested that the money should be provided to gas development and production companies, including the Bangladesh Gas Fields Company Ltd (BGFCL) and Sylhet Gas Fields Company Ltd (SFGCL), for proper development of the energy sector.
"The government should judiciously select the company and projects for spending the public money," said Professor M Tamim of Bangladesh University of Engineering and Technology.
It should constitute a committee comprising experts and professionals to scrutinise the proposals from state-owned gas entities, he said.
"Currently, the BAPEX do not require much money as we have allocated Tk 35 billion only for BAPEX to carry out its necessary works," said Professor Tamim, who was a special aide to the Chief Adviser of the previous caretaker government.
Petrobangla officials said due to insufficient fund allocation to the local companies their shares in the country's total gas output fell drastically over the past years compared to those of the international oil companies (IOCs).
In 2004, local companies shared around 76 per cent of the total gas output, whereas the IOCs only 24 per cent.