Budget allocation for power, energy sectors

Tk 19,100cr allotted as subsidy, loan

Power and Energy sector has got an allocation of TK 19,100 crore as subsidy and cash loan in the proposed budget of FY-2019-20. 

The subsidy in the energy sector got doubled from Tk 4,500 crore of the previous fiscal to Tk 9,600 crore in the proposed budget, an inevitable allotment due to the recent import of high priced LNG. Rest of the amount, Tk 9,500cr, has been allotted to power sector as cash loan. Mentionable, subsidy to the ministry was much lower at TK 3,061 crore in FY-2017-18 and it was just TK 300 core in FY-2016-17. 

Nasrul Hamid, state minister for energy and power, at a programme in Dhaka recently said, “As the gas price has not been adjusted since the arrival of LNG, the government has spent Tk 14,000 crore from its coffer to facilitate LNG imports.”

The government’s major plans lie in transmission and distribution systems, he added.

The power sector has been the most successful sector for the Awami League-led government in the last one decade, driven by its emphasis on raising the generation capacity. By next year, each upazila will have 100 percent access to electricity. But the energy sector is still a far cry.

Poor network for distribution and transmission of electricity and a high demand-supply gap of gas are to blame for the delay.

In the proposed budget Power Development Board (PDB) has got the allocation as a loan. The government does not provide subsidy to the power sector any more instead, the sector mostly gets the money as a loan nowadays.

The power division received Tk 26,065 crore in FY-2018-19, up from Tk 24,212 crore in 2017-18 and the energy and mineral resources division got Tk 1,986 crore, down from Tk 2,290 crore in the outgoing fiscal year. Two distribution projects were delayed by two years and now will take another three years to finish if their construction begins in the new fiscal year, meaning distribution related problems will persist for another three years.

Coal reserves stand at 3,300 million tonnes- equivalent to 78 trillion cubic feet (tcf) of natural gas. Gas reserve stands at 12.11 tcf.