The government has raised subsidy allocation for power in the revised budget for this fiscal year by Tk500 crore from Tk5,500 crore to address probable increase in power purchasefrom the costly private sector plants.
The 9% increase in subsidy for purchasing power from rental, quick rental and liquid fuel-based power projects for the rest of the fiscal year was revealed at a recent inter-ministerial meeting on how the Finance Division could subsidise the purchase of electricity from India.
The Power Development Board proposed providing subsidy to purchasing power from India just as subsidy is provided for purchase from the rental, quick rental and liquid fuel-based plants.
The Finance Division, however, decided not to provide the subsidy for Indian electricity.
Meanwhile, despite the hike in power tariff by 6.96% last month, the power subsidy showed a sharp rise in March compared to that of the previous month.
The Finance Division also decided to submit a proposal to Finance Minister AMA Muhith on subsidising power purchase from India under the revenue budget, an official of the division who attended the meeting told the Dhaka Tribune yesterday.
At present, the government pays the subsidy amount to the PDB for purchasing electricity from the private sector under revenue budget and there is no fund allocated for subsidising electricity purchase from India in the current fiscal budget.
The Finance Division asked the PDB officials if they had followed itssuggestionswhile signingthe Bulk Power Transmission Agreement withthe Power Grid Corporation of India.
Earlier, the PDBhad soughtTk39.74 crore from the Finance Divisionfor importing electricity from Indiaand Tk267.14 crore for paying December 2013-January 2014 billsof quick rental power.
The Finance Division decided to provide the amount sought for bill payment.
PDB data shows that Indian electricity costs it Tk6 a unit on average compared to quick rental’s nearly Tk18.
Bangladesh signed the agreement in 2010 to purchase 500MW electricity from India and it started importing power commercially in October last year. So far, the daily import has marked 440-450MW.
The PDB purchases 1,405MW of electricity from rental and quick rental power projects and 1,066MW from independent power plants.
The subsidy on power during nine months of this fiscal year stood at Tk5,146.22 crore althoughthe figure at the end of Januarythis year was Tk4380.92 crore.
Before the power tariff increased by 6.96% last month, the subsidy amounted to Tk231.21 crore in February, but it rose by Tk53.98 crore to Tk285.19 crore the next month.
Generation of costly electricity from liquid fuel-based power projects jumped to over 2100MW from March, which was nearly half in the previous month.
Finance Secretary Falze Kabir presided over the inter-ministerial meeting at the Finance Division. High officials of the Power Division and the PDB attended the meeting.