The state-owned Power Development Board (PDB) incurred a Tk41,521cr loss in the last 10 years, as electricity production cost has increased due to oil-based electricity cost being higher than that of gas-based electricity.
The Bangladesh Economic Review 2017 disclosed this information in a report released on June 1.
The PDB was selling electricity at a lower price to consumers while buying it at a higher price from government producers.
As of now, the bulk and retail price of electricity are not synchronised. Also, the production cost of oil-based electricity has risen due to a gas supply shortage.
At the bulk level, the selling price of electricity per unit is Tk4.87 against Tk6.27 per unit of supply price.
So, every single unit is subsidised by Tk1.40 per unit. The total subsidised amount in the last fiscal year stands at Tk5,100cr.
Though the economic report offered no reasons for the loss, a PDB official, wishing anonymity, said power is sold to distribution companies at a lower price than its manufacturing price.
He said: “Because we purchase power from the private sector, there is still harmony between the demand and supply. Otherwise there might be heavy load shedding.”
Accordingly to the report, the loss was Tk993.24cr in FY2007-08, Tk828.61cr in FY2008-09, Tk635.76cr in FY2009-10, Tk4587.01cr in FY2010-11, and Tk6,359.86cr in FY2011-12.
The loss stands at Tk5,026.11cr in FY2012-13, Tk6,806.53cr in FY2013-14, Tk7,276.60cr in FY2014-15, Tk3,866.76cr in FY2015-16 and Tk5,141.27cr in FY2016-17 [as of April 2017].
The report disclosed that, in the ongoing fiscal year as of February 2017, the country’s total power generation was 15,379MW, including 7,054MW from the public sector, 5,525MW from the private sector and 600MW from Indian imports.
Of the total power generation, 67.94% is gas based, 1.96% hydro electricity, 1.85% coal based, 7.73% imported, and 20.52% is from oil-based power plants.
In this fiscal year, as of January 2017, 14,980.31 million kilowatt-hours were produced by government-run plants while 17,945.33 million kilowatt hours were from the private sector.
Thus, 45% of the power is generated by the public sector and 47% by the private sector. The remaining 8% is imported from India.
Energy Adviser to Consumers Association of Bangladesh Prof M Shamsul Alam told the Dhaka Tribune: “We requested Bangladesh Energy Regulatory Commission to instruct the PDB to reduce its oil-based electricity production and install energy-efficient machinery for electricity production. However, no steps had been taken by PDB.”
PDB was also asked to retire its old, inefficient power plants, but it did not do that as well, he said.
PDB chairman Khaled Mahmood told the Dhaka Tribune: “It is true that PDB faces a yearly loss, but that occurs as a favour to customers. PDB now wants to transform this loan into a subsidy.”
“There is a big difference between production and supply costs for power. The loss is covered by taking loans from the government. We have already requested them to turn the loan into a subsidy,” he added.