"Top policymakers are divided over whether the government should go for increasing the power tariff further or issuing more bonds through the banking system," said a top official at the state-owned Bangladesh Power Development Board (BPDB), reports UNB.
He said if the government wanted to raise the power tariff, either it had to do it before Ramadan or after Ramadan - these were the questions almost every day being discussed at the policy level.
They were also analysing the impacts of floating more bonds to reduce the burden of soaring losses on the part of BPDB, he added.
According to official sources, currently, the production of each unit of electricity costs about Tk 12 while it sells at a rate of about Tk 6.7.
It means the government has to bear a loss of Tk 5.3 per unit, a top BPDB official told the news agency.
The BPDB's Annual Report 2022-23 shows, the BPDB, as a single buyer, generated 87,024 million kilowatt hours of electricity in the fiscal year 2022-23 at a total cost of Tk 986.46 billion (98,646.42 crore).
Its per unit production cost was Tk 11.33 while it was selling electricity at Tk 6.7 per unit incurring a loss of about Tk 4.63 per unit.
The bulk tariff was last raised by 8.06 per cent to Tk 6.70 from Tk 6.20 per unit on January 31 with effect from February 2023.
Against this, its revenues were Tk 508.58 billion (50,858.25 crore), incurring a loss of Tk 477.88 billion (47,788.17 crore), showed the BPDB Annual Report.
With this huge loss, the government has been in great trouble as it has to purchase electricity from private sector power producers while it generates electricity worth Tk 133.06 billion (13,306.62 crore) from its own generation plants.
The annual report also shows that the BPDB's average per unit production cost from its own plants is Tk 7.63, while it is Tk 14.62 for the independent power producers or IPPs (private sector). The rate at rental plants is Tk 12.53, at public plants Tk 6.85 and imported power from India costs Tk 8.77.
The government purchases electricity from the private sector and India in dollars.
According to official sources, the government's cumulative outstanding bills have now jumped to about $5 billion, of which the backlog amount in the power sector is about $4 billion (about Tk 43,093 crore), and the remaining $1 billion is in the energy sector.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid also admitted the severity of the crisis.
"Actually the crisis is not of local currency. Somehow we can manage it. But the main crisis is the dollar. We're not getting dollars from Bangladesh Bank as per our needs," he recently told the news agency.
He noted that the power and energy sectors needed at least $1 billion a month to meet payment obligations.
In such a situation, the government recently introduced a number of bonds through Bangladesh Bank to help the BPDB to clear some dues.
"Initially, we have floated bonds worth Tk 5000 crore and it may go up to Tk 12,000 crore," said a BPDB official on condition of anonymity, adding that it will not be enough to cover the losses, although the government is providing subsidies on a regular basis.
To raise power tariff or float more bonds remains a tough choice
FE Team | Published: February 12, 2024 23:55:43
To raise power tariff or float more bonds remains a tough choice
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