Tk 94b subsidy proposed for power, energy sector

The government has proposed Tk 94 billion as subsidy to the power and energy sector for the next fiscal (2014-15).
This amount was shown in the budget document as “net lending” to Power Development Board (PDB) and Bangladesh Petroleum Corporation (BPC), both state-owned entities.
Official sources at the Power and Energy Ministry said the government provides subsidy to the power and energy sector though a credit programme to keep pressure on the state entities to pay back the amount, according to a news agency.
They said another objective of such mechanism is to show the amount as a loan instead of direct subsidy to avoid its financial implication in receiving foreign loans.
“But actually, the amount is a subsidy which is never paid back by the state-owned entities,” said an official at the Power Division.
Officials said the Power Division received about Tk 60 billion as subsidy in the outgoing fiscal (2013-14) while the Energy Division received about Tk 50 billion for import of petroleum fuel.
Power Division’s subsidy is spent in purchasing electricity from private sector while Energy Division’s subsidy is utilized for supplying fuel to private power plants at lower cost.