- Consumers and businesses to suffer from the gas crisis
- Petrobangla would have to continue importing expensive spot LNG to meet the gas demand
- Again, Power Development Board will have to bear the capacity payment for having standby capacity
- Utilities my initiate gas and electricity price hike process to pass on the financial deficits
Volatile natural gas prices in the spot market and the capacity payment to private power producers are the key issues to look into for the power and energy budget.
But the proposed budget has not focused on any of these issues. In his entire budget speech, Finance Minister AHM Mustafa Kamal on Thursday instead emphasised the continuity of the existing power generation and transmission projects.
He did not mention any direction on securing energy security, especially how gas supply would be ensured in the coming days amid the depleting local supply and the volatility of the imported LNG prices in the global market.
Rather, he highlighted some known rhetoric like the government's milestone achievement of 100% electrification across the country and the power generation capacity. He also focused on the system loss in power distribution which has been reduced from 14% to 8%.
He hoped that the country will be able to ensure quality electricity supply to all in the near future, after the completion of the existing 34 power plants with a capacity of 13,530MW including some mega projects.
For the continuity of these projects, he proposed a total of Tk26,066 crore for the Power Division and the Energy and Mineral Resources Division for fiscal 2022-2023.
Of the total proposed allocation, Tk24,196 crore was sought for the power sector while Tk1,870 crore was proposed for the Energy and Mineral Resource Division.
In the outgoing fiscal year, the allocation of the sectors was Tk27,484 crore.
Regarding energy security, the finance minister highlighted some old information.
"To meet the increasing demand for gas, 600-753 million cubic feet of imported LNG or liquefied natural gas is being added to the national grid daily," he said.
But Kamal overlooked the new gas exploration work in the local fields which is the cheapest option for the country.
On the other hand, to meet the increasing demand for fuel in the country, he stated that the refining capacity of the Eastern Refinery Limited (ERL) Unit-2 will be enhanced by 30 lakh tonnes and it has been undertaken.
"After implementation of the project, the refining capacity of Eastern Refinery Limited will be increased to 45 lakh tonnes per annum," he said.
But the latest information says that the project was taken around 11 years back but still there is no progress. Even the probable contractor has abandoned the project recently for some unknown reasons.
The country has a demand of around 63 lakh tonnes of liquid fuel annually of which only 15 lakh tonnes can be refined in the ERL.
Therefore, three-fourths of the total demand is being met by importing refined fuel which is costlier than crude oil.
In addition, due to limited storage capacity, the country also chronologically fails to hoard enough fuel while the price goes down in the international market.