The next fiscal year gets Tk134.5b as subsidy in power and energy sectors – 34% less than the current fiscal and six times higher than the amount the incumbent government declared in its first budget of 2009-10 fiscal.
Of the proposed subsidy allotment, Tk55bn is allocated for power and Tk79.5bn for energy and mineral resources. The FY 2012-13 subsidy for the sectors is Tk204b, of which Tk51.7b goes for power and Tk152.3b for energy.
In the FY 2009-10, the total subsidy for power and energy sectors was Tk18.94b, of which Tk9.94b went to power sector while Tk9b to energy.
The FY 2013-14 subsidy is six times higher than the amount of 2009-10 fiscal and the current fiscal subsidy is nine times higher than that of 2009-10.
The huge amount of subsidies mainly went to quick rental power plants, according to officials of Power Development Board.
Bangladesh University of Engineering and Technology (Buet) Professor and energy expert Ijaz Hossain told the Dhaka tribune power and energy sectors will bear the brunt of less subsidy and see hike in price of electricity, gas and fuel oil.
He added that the sectors came under less subsidy only to pave the way for the proposed Padma Bridge.
A total of Tk113.512bn has been allocated for the power, energy and mineral resources sectors in the proposed budget for fiscal 2013-14.
The latest allocations for these sectors mark a 19% increase compared to previous allocations, and amounts to 5.1% of the Tk2.22tn total outlay.
The proposed development and non-development allocations for the sectors equal Tk113.512bn, according to the budget proposed by Minister of Finance Abul Maal Abdul Muhith in parliament Thursday.
In the proposed budget, total Tk90.6bn has been allocated for the power division and Tk22.91bn for the energy and mineral resources division.
In the outgoing fiscal 2012-13 budgetary allocations for the three sectors came to Tk95.44bn, while revised allocations stand at Tk99.93bn.
The minister in his budget speech said the government is providing resources to give highest priority to the power and energy sectors.
He said: “Once all the power plants we have decided to set up are in place, by 2017 we will have the capacity to generate 19,701MW of electricity, and the demand and supply of power will reach equilibrium.”
By 2015, the minister is hopeful total capacity of power generation will reach 14,500MW.
He said: “The beneficiary coverage of electricity has been raised from 47% to 60%. At the same time, per capita electricity production has increased from 220KW to 292KW. Meanwhile, we have installed 2m solar home systems.”
The minister said: “Along with power, we have also given special priority to ensure energy security. We are extracting 2,260mmcft of natural gas daily from 19 gas fields. In our tenure, we have added 680mmcft natural gas to the national grids.”
Muhith proposed to reduce existing customs duties on solar lanterns and LED lamps from 12% to 5%, leaving other taxes unchanged.
“To minimise the use of firewood and chemical fertilisers, and increase the use of biogas plants and solar home systems in the country, present import duties of 12% and 25% on some identified raw materials for biogas plants is to be reduced to 5% and 10% respectively,” he said.
The Minister of Finance in his speech said: “In order to supply LP gas for domestic use, create employment opportunities, develop local industry and save foreign currency, local manufacturers of LPG cylinders have been exempted from paying VAT up until 30 June, 2013. I propose to extend this VAT exemption facility up to 30 June, 2017.”
Gas cylinders with the capacity of 5000litres are currently subject to only 3% customs duty; the finance minister proposed imposing customs duty of 10%, in the interest of local industries.
