on to withdraw subsidy from petroleum fuels,” Energy and Mineral Resources Division (EMRD) secretary Abubakar Siddique told daily sun yesterday. He said the power division is yet to place any proposal to the Prime Minister Office (PMO) to hike petroleum fuel price by withdrawing subsidy from the energy sector. The EMRD secretary mentioned that the government is now providing around Tk 4000 crore subsidy annually to supply petroleum fuels at lower cost compared to their import rates. Another energy division official said the government has been providing subsidy on fuels to maintain the growth in power, energy, readymade garments and fertiliser sector. The IMF in its suggestion mentioned that withdrawal of subsidy from petroleum fuels is important to maintain the country’s economic growth. But the global lender is silent over allowing private sector to import petroleum fuels without taxes and duties for electricity generation, the EMRD high official said. “They (IMF) always put pressure on energy division to hike fuel tariff. The EMRD earlier placed a similar proposal at the outset of the present government but the Prime Minister rejected it,” he said. Bangladesh Energy Regulatory Commission (BERC) Chairman AR Khan told daily sun that the government always hikes petroleum fuel tariff through executive order. He said that the government earlier raised the petroleum fuel prices by its own, not being influenced by the IMF or the World Bank. Bangladesh Petroleum Corporation (BPC) has set a target to borrow $650 million to import 27.20 lakh tonnes of petroleum fuels for the July-December this year. The BPC would require $2364.50 million to purchase such amount of petroleum fuels for the period, an official concerned of BPC, said. “We have already told the IMF to fix its’ indicative target (IT) ceiling on internal and external borrowing on fuel import as per the BPC-set target,” he added. The government had to spend $4.6 billion to import 5.3 lakh tonnes of petroleum fuels in the last fiscal year 2013-2014, the BPC official said, adding , the BPC set a target to import 57 lakh tonnes of fuels this fiscal. During the last fiscal year, the government reduced its borrowing to $1200 million from $2200 million of the previous fiscal year to fulfill the IMF condition. The BPC would not require any loan in the next two years if the government provides them Tk 8,053.28 crore outstanding subsidies for the period between 1999 and 2013, the official said. He said BPC has already sought Tk 2,200 crore fund support from the government to import petroleum fuels and repay loans for the next six months between July and December, 2014. “The corporation would face fund crisis in importing petroleum fuel if the government doesn’t provide the said amount,” BPC Chairman Md Eunusur Rahman told the Energy and Mineral Resources Division secretary. The BPC would require $2364.50 million to import total 27.20 lakh tonnes of petroleum fuels required for the next six months, the BPC official said. Besides, another fund worth $1080.01 million would be required to repay loans received from the Islamic Trade and Finance Corporation (ITFC) under a deferred payment support facility and also through syndication of banks, he said. “The BPC at present suffers a shortage of Tk 2,200 crore as it needs total $3444.51 million to repay loans and make payments to petroleum fuel suppliers for ensuring uninterrupted fuel supply for power plants,” the official told the ministry. The corporation expects that it would be able to arrange total $2100 million fund support as loan from ITFC and availing deferred payment facility from four fuel suppliers. The BPC borrows short-term loan from different sources to import petroleum fuels, he said. The ITFC, an enterprise of Islamic Development Board (IDB), would provide $1200 million. The proposal to get the loan has already been approved by the government’s standing committee on non-concession loan, an inter-ministerial committee headed by the finance minister, on May 18, 2014. In the next fiscal, the BPC would also avail $900 million deferred payment facility from four suppliers—$300 million from PETCO-Malaysia, $250 million from PETRO-China, $200 million from PNOC-EC and $150 million from UNIPEC-Singapore—for 150 days with 3.78 percent interest rate annually, he added. The BPC has requested the standing committee on non concession loan to allow it to seek the $900 million deferred payment facility from the fuel suppliers, he said. Even if it is allowed to make deferred payment, the BPC could require Tk 2200 crore to make payment for import of petroleum fuel between July and December, 2014 period.
Monday, October 13, 2014
IMF presses for hike in petroleum fuel price:Daily Sun
on to withdraw subsidy from petroleum fuels,” Energy and Mineral Resources Division (EMRD) secretary Abubakar Siddique told daily sun yesterday. He said the power division is yet to place any proposal to the Prime Minister Office (PMO) to hike petroleum fuel price by withdrawing subsidy from the energy sector. The EMRD secretary mentioned that the government is now providing around Tk 4000 crore subsidy annually to supply petroleum fuels at lower cost compared to their import rates. Another energy division official said the government has been providing subsidy on fuels to maintain the growth in power, energy, readymade garments and fertiliser sector. The IMF in its suggestion mentioned that withdrawal of subsidy from petroleum fuels is important to maintain the country’s economic growth. But the global lender is silent over allowing private sector to import petroleum fuels without taxes and duties for electricity generation, the EMRD high official said. “They (IMF) always put pressure on energy division to hike fuel tariff. The EMRD earlier placed a similar proposal at the outset of the present government but the Prime Minister rejected it,” he said. Bangladesh Energy Regulatory Commission (BERC) Chairman AR Khan told daily sun that the government always hikes petroleum fuel tariff through executive order. He said that the government earlier raised the petroleum fuel prices by its own, not being influenced by the IMF or the World Bank. Bangladesh Petroleum Corporation (BPC) has set a target to borrow $650 million to import 27.20 lakh tonnes of petroleum fuels for the July-December this year. The BPC would require $2364.50 million to purchase such amount of petroleum fuels for the period, an official concerned of BPC, said. “We have already told the IMF to fix its’ indicative target (IT) ceiling on internal and external borrowing on fuel import as per the BPC-set target,” he added. The government had to spend $4.6 billion to import 5.3 lakh tonnes of petroleum fuels in the last fiscal year 2013-2014, the BPC official said, adding , the BPC set a target to import 57 lakh tonnes of fuels this fiscal. During the last fiscal year, the government reduced its borrowing to $1200 million from $2200 million of the previous fiscal year to fulfill the IMF condition. The BPC would not require any loan in the next two years if the government provides them Tk 8,053.28 crore outstanding subsidies for the period between 1999 and 2013, the official said. He said BPC has already sought Tk 2,200 crore fund support from the government to import petroleum fuels and repay loans for the next six months between July and December, 2014. “The corporation would face fund crisis in importing petroleum fuel if the government doesn’t provide the said amount,” BPC Chairman Md Eunusur Rahman told the Energy and Mineral Resources Division secretary. The BPC would require $2364.50 million to import total 27.20 lakh tonnes of petroleum fuels required for the next six months, the BPC official said. Besides, another fund worth $1080.01 million would be required to repay loans received from the Islamic Trade and Finance Corporation (ITFC) under a deferred payment support facility and also through syndication of banks, he said. “The BPC at present suffers a shortage of Tk 2,200 crore as it needs total $3444.51 million to repay loans and make payments to petroleum fuel suppliers for ensuring uninterrupted fuel supply for power plants,” the official told the ministry. The corporation expects that it would be able to arrange total $2100 million fund support as loan from ITFC and availing deferred payment facility from four fuel suppliers. The BPC borrows short-term loan from different sources to import petroleum fuels, he said. The ITFC, an enterprise of Islamic Development Board (IDB), would provide $1200 million. The proposal to get the loan has already been approved by the government’s standing committee on non-concession loan, an inter-ministerial committee headed by the finance minister, on May 18, 2014. In the next fiscal, the BPC would also avail $900 million deferred payment facility from four suppliers—$300 million from PETCO-Malaysia, $250 million from PETRO-China, $200 million from PNOC-EC and $150 million from UNIPEC-Singapore—for 150 days with 3.78 percent interest rate annually, he added. The BPC has requested the standing committee on non concession loan to allow it to seek the $900 million deferred payment facility from the fuel suppliers, he said. Even if it is allowed to make deferred payment, the BPC could require Tk 2200 crore to make payment for import of petroleum fuel between July and December, 2014 period.
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