The Energy Division’s plan to create a petroleum development fund seems to have been stuck in the quagmire.
According to the sources, the fund would be raised by taking a portion of earning from the sales of petroleum products in the domestic market.
Bangladesh Petroleum Corporation (BPC) would use the fund to develop its projects and refine and improve the supply system of fuel oil.
“No substantial progress has been made so far. But we are on the way to prepare a draft policy and the officials already sat several times in this regard,” Mozammel Haque Khan, Energy Division Secretary, told the Dhaka Tribune.
Energy Division sources said the fund is likely to be raised with Tk0.50 to Tk1.00 earned from the sale of each litre of petroleum products.
But questions remain that how effectively the fund-raising would take place when BPC is run with subsidy.
“Creation of such a development fund with the revenue earnings of BPC, a subsidy-based organisation, is difficult,” said BPC chairman Md Eunusur Rahman.
He said the government could, however, launch this sort of fund if it wants.
In the country’s energy sector, there are two similar funds – Gas Development Fund and Electricity Development and Maintenance Fund.
Although these two funds were created by the Bangladesh Energy Regulatory Commission (BERC), the petroleum development fund is being formed at the government’s own initiative.
According to a member of the regulatory body, the fund if not created by the BERC would see a little success.
“Generally the fund of this kind turns effective when it is created by the BERC,” said Salim Mahmud, a member of the regulator.
However, there is nothing to oppose the move if the government wants to create such fund, he said.
Official sources said the gas development fund was created to strengthen oil and gas exploration and production in the country by the state-run Petrobangla while the electricity development fund was to increase power generation by the government-owned firms.
BERC launched the gas development fund pulling money from the increased gas price effective since August 2009.
The fund is being utilised by the Bangladesh Gas Fields Company Ltd, Sylhet Gas Fields Ltd and Bangladesh Petroleum Exploration and Production Company Ltd – three subsidiaries of Petrobangla – to implement different projects.
BERC created the Electricity Development and Maintenance Fund with 5.17% of revenue earning by the Bangladesh Power Development Board (PDB) through selling electricity to the distribution agencies since February 2011. A total of Tk7bn have been deposited to the fund till now.
PDB currently has a number of projects to be implemented under the fund, officials said.
