The power and energy sectors are likely to receive an allocation of around Tk20,050.67 crore in the upcoming budget, around 74% higher than the allocation for the outgoing fiscal year, officials say.
In the current fiscal, the total budgetary allocation for the sectors is Tk11,540 crore.
According to sources, of the total allocation proposed, the power sector is expected to get Tk16,485.17, which is around 78% higher than Tk9,284 crore allocated for the current fiscal.
The energy sector is likely to receive Tk3,565.50 crore in the next fiscal, a rise by 58%. The allocation is Tk2,256 crore in the outgoing fiscal.
Officials at the Power, Energy and Mineral Resources Ministry, however, could not give a clear idea about the subsidy to be given for the sectors in the next budget.
Subsidy for the power sector in the current fiscal is Tk7,100 crore while Tk2,300 crore for the energy sector. The two sectors were given subsidy of Tk13,450 crore in 2013-14 fiscal year.
The subsidy amount was shown in the budget documents as net lending to the Power Development Board and the Bangladesh Petroleum Corporation, both state-owned entities.
However, Tk2,300 crore subsidy meant for the current fiscal remained unspent in the first three quarters due to the fall of prices of fuel oil globally.
Due to the lower price, the subsidy allocation for the power and energy sectors could be around Tk9,000 crore in the proposed budget – Tk8,000 for the power sector alone, officials say.
Subsidy for the Power Division is spent in purchasing electricity from private sector while the Energy Division’s subsidy is utilised for supplying fuel to private power plants at lower cost.
On May 25 this year, Finance Minister AMA Muhith at a pre-budget discussion hinted that fuel oil prices could be reduced in the domestic market in the next fiscal. He said the government needed time to adjust the prices.
Officials at the Power and Energy Ministry say the government provides subsidy to the two sectors 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 of the Power Division.