Tk 9,400cr subsidy proposed for power, energy sector

The government has proposed Tk 9,400 core 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.

PowerOfficial 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.

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 6000 crore as subsidy in the outgoing fiscal (2013-14) while the Energy Division received about Tk 5000 crore 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.