State-owned Bangladesh Power Development Board (BPDB) has sought to reduce petroleum prices as per international market rate to reduce electricity generation cost aimed at reducing the power subsidy to Tk 2000 crore a year. The government has targeted to provide Tk 4000 crore in subsidy to the power sector this year. The BPDB produces 2875MW of electricity from costly liquid fuel-fired power proje
cts, specially the rental and quick rental ones. BPDB secretary Md Jahirul Huque sent an official letter to power secretary Monowar Islam late at the end of month to take steps in this regard and said, “The adjustment of petroleum tariff for electricity generation would also prevent power tariff hike.” “State-run Bangladesh Petroleum Corporation (BPC) now supplies furnace oil at Tk 62 per litre and diesel at Tk 68 a litre to power plants,” BPDB secretary said in the letter. “Some private power projects import furnace oil by themselves at prices between Tk 35 and Tk 40 a litre that allows them to reduce electricity production cost,” he informed the power division. The additional cost of electricity generation due to providing subsidy for higher fuel tariff creates additional burden, the BPDB observed. “Petroleum fuel prices have come down significantly in the international market,” the letter reads. BPDB currently produces electricity at the cost of Tk 17.06 per unit from oil-fired plants and at 27.91 per unit from diesel-fired power plants. BPDB produces 28 percent of its electricity from liquid fuel-fired power projects. Talking about adjustment of fuel tariff for electricity generation, BPC chairman AM Badruddoja, however, said, “The BPC has no plan to adjust furnace oil and diesel tariff for electricity generation now.” He also said they are yet to get any proposal to adjust fuel tariffs for electricity generation. During the public hearing on power tariff hike at Bangladesh Energy Regulatory Commission (BERC) in January this year, BPDB chief Engineer Mizanur Rahman said the BPDB would not require adjusting power tariff if the government reduces fuel tariffs for power generation. Civil society members also raised their voice against the BPDB’s proposal for a fresh hike in power tariff.
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