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Still no policy on using Energy Security Fund

  • Published at 01:05 am August 26th, 2016

Any sort of policy is yet to be finalised on how to use the country's Energy Security Fund, even though almost a year has passed since the Bangladesh Energy Regulatory Commission (BERC) decided to create the fund. As per the draft guideline, for the sale of each cubic metre of gas, Tk1.01 is supposed to stored in the special fund. The interest on the savings will also be kept in the fund along with the surcharge and profit on the fund money. In that way, a total Tk2,500 crore is estimated to be saved for the energy security fund annually. Although the gas distribution companies have been keeping a separate account on how much they had contributed on the fund, no fruitful steps have so far been taken to spend that money. According to the draft guideline, money from the fund – which came into effect from September 1 last year – is supposed to be used for research work on developing the energy sector. Sources said the energy regulator was still unsure on the spending criteria for the fund. However, there are scopes to utilise the fund to bring liquefied natural gas (LNG) and liquefied petroleum gas (LPG) and to meet energy deficiency in the future. The chairman of the BERC, AR Khan, said a part of the money earned by selling gas should be kept for investing on measures that could ensure energy security for the future generation. When the limited gas reserved will be on the wane in the near future, then this fund would come in handy in meeting the country's energy demand, he said. The BERC chief said that a policy on using the Energy Security Fund would be finalised soon. Along with the fund, the energy regulator wants to ensure priority of gas usage by stopping gas theft and the misuse of valuable resources. AR Khan said the Energy Security Fund had a broader scope than the Gas Development Fund, which can only be used for exploration and extraction of the country’s gas. In August 2009, the BERC created the Gas Development Fund through an 11.22% hike in gas prices to increase the financial capacity of state-run gas exploration companies. At the moment, there are financial constraints in constructing LNG and LPG terminals in Bangladesh. But the government has plans to construct four LNG terminals – for which it will need an investment of nearly Tk50,000 crore. Besides, there are also plans for projects to increase the supply of LPG in the country. However, because of fund crunch, work in these projects have not made much progress.