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Dhaka Friday,  Mar 29, 2024

BDT 1,000 Crore given to Subsidize LNG import

Mhabub Roni

The government has given subsidy to Petrobangla of an amount of about BDT 1 thousand crore to compensate for the extra cost that was imposed on it due to the import of Liquefied Natural Gas (LNG). The government has subsidized the state-run petroleum agency Petrobangla for the first time since the beginning of LNG import that commenced in August of last year.

Insider sources from the Petrobangla said that in October 2018, they asked for a subsidy amounting 5 thousand and 400 crore TK for the fiscal year of 2018-19 to the ministry of finance and no subsidy was given until the last March.

Director (Finance) of Petrobangla Harunur Rashid said that Petrobangla had a deficit of 3 thousand crore TK until March of this year. However, the recent subsidy will only cut the deficit by its one-third. The import volume of LNG is likely to increase by a margin in the coming future, so the deficit of Petrobangla is also likely to rise. The deficit must be compensated by raising the price of gas along with giving more subsidy to the sector.

Petrobangla buys natural gas from the natural gas extracting companies at an average rate of 6 TK per cubic meter whereas the cost to import each cubic meter of LNG is 38 TK. The government is mixing the LNG with the local supply line of natural gas which has raised the average price of the mixed gas by a margin.

Sources from the finance ministry agreed with the fact that Petrobangla’s expenditures have rocketed due to the import of LNG. Yet, the ministry sources said that they have asked for more specific and detailed info about the expenditures and the required subsidy from the Petrobangla authority.

Around 50 crore cubic feet of LNG is being supplied daily to the national grid from the floating LNG terminal situated in Maheshkhali, Cox’sbazar. It’s the country’s only LNG terminal that is now being operated by Exelerate Energy of USA. Currently, the government is importing LNG from Rasgas from Qatar and Oman Trading Intl from Oman.

Another LNG terminal from Summit Group is likely to be commissioned soon which will have a re-gasification capacity of 50 crore cubic feet per day. The deficit will escalate more once the Summit’s terminal starts supplying 50 crore cubic feet of more LNG to the grid, says the Petrobangla sources.

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