Distribution cos reaping benefits but Petrobangla in tight corner

Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) is facing severe fund shortage due to various reasons, including Liquefied Natural Gas (LNG) import pressure. The state-owned agency is seeking loans from multinational HSBC, Standard Chartered and Islamic Trade and Finance Corporation (ITFC) to overcome the ongoing fund crisis.

However, the employees of 13 companies under Petrobangla are getting substantial financial benefits in the name of performance bonus and Workers Profit Participation Fund (WPPF).

Petrobangla’s accounts department said the employees and officers of these companies are getting four to eight bonuses per year and profits up to Tk 18 lakh each. According to the Bangladesh Energy Regulatory Commission (BERC) direction, Petrobangla’s gas distribution companies cannot make any profit.

Due to this, the companies are following an alternative way to get WPPF by delaying the payment of gas sales to Petrobangla while the bank is withdrawing bonus and WPPF money by showing the interest on the money allocated in the name of various development projects as profit, which is completely illegal, said Petrobangla officials preferring not be named in fear of influential people.

Petrobangla chairman Janendranath Nath Sarkar told The Business Post, “It is true that the officers and employees of the companies are taking money in the name of profit sharing and bonus.” But he cannot give the exact figure.

Bonuses and profits galore

According to Bangladesh Labour Act-2006, the officers and employees of public-private companies will get 5 per cent WPPF of the company’s annual profits. As per BERC guidelines, the six gas distribution companies affiliated with Petrobangla are not profit-oriented. BERC sets gas prices for the companies in a way so that they cannot be able to reach the breakeven point aimed at keeping gas prices affordable at consumer level.

Petrobangla’s accounts department and financial management unit said among 13 companies under Petrobangla, only four--Barapukuria Coal Mining Company Limited (BCMCL), Bangladesh Gas Fields Limited (BGFL), Sylhet Gas Fields Company Limited (SGFCL) and Bapex--are making profits, but most companies mainly KGDCL in Chattogram are sharing record profits and bonuses for years.

On April 30, KGDCL’s 195th board meeting approved three bonuses for officers and employees. In a letter sent to Petrobangla, the KGDCL authority said KGDCL officials and workers are playing an important role in increasing the government’s revenue by distributing gas. Three bonuses equivalent to basic salary were recommended in recognition of their success.

Earlier in the FY22, KGDCL distributed Tk 18 lakh to its employees under WFFP without paying Tk 3,093 crore accumulated from gas sales over the last 13 years to Petrobangla.

Though Petrobangla repeatedly issued letters in this regard, KGDCL has yet to pay bills. Finally, Energy and Mineral Resources Division has recently formed a committee to resolve the issue. Petrobangla says KGDCL distributes, on average, 7-8 bonuses to its employees annually.

Md Rafiqul Islam, managing director of KGDCL, told this correspondent that the profit and bonus have been shared as per the decision taken at the company’s board of directors meeting chaired by the energy secretary. “We can do nothing sans the board’s decisions.”

BCMCL’s annual report for FY21 said the company’s income after tax in FY21 was Tk 116.87 crore out of which Tk 2.98 crore was shared as employee profit. According to the report, each employee of BCMCL received Tk 6 lakh. Income after tax in FY22 was Tk 217.79 crore and combined profit share was Tk 6.90 crore and per person got Tk 18 lakh.

Sundarban Gas Distribution Company distributed Tk 12 lakh to each employee while Jalalabad Gas Distribution Company Limited Tk 4 lakh, Paschimanchal Gas Distribution Company Tk 4.5 lakh and five bonuses, Madhyapara Granite Mining Company Limited Tk 80 thousand, Bakhrabad Gas Distribution Company Tk 4 lakh.

Titas Gas Transmission and Distribution Company shared profit of Tk 20.36 crore among its 1,000 officers and workers in FY21 and Tk 22.80 crore in FY22.

Petrobangla’s Accounts Department said various projects worth around Tk 8,000 crore are being implemented by GTCL. The company is under heavy financial pressure. As a result, the company is not able to share bonus and WPPF.

Apart from this, Bapex employees get two bonuses if the company can discover a new gas field while Petrobangla employees get one bonus. Petrobangla’s officials said Bapex officials and employees will get two bonuses as Ilisha-1 of Bhola has recently been declared as the 29th gas field in the country.

A senior accounts department official of Petrobangla said that KGDCL owes Petrobangla more than Tk 3,000 crore. Other companies pay Petrobangla bills after every three months. Earlier, these companies used to pay bills after at least six months.

However, they deposit the money in the bank and add the interest earned to the annual gross income to show the profit. Besides, the companies share the profits by showing dividends to the bank interest of development projects.

Former member of BERC Maqbul-e-Elahi Chowdhury told this correspondent that the distribution companies are charging extra gas bills from unmetered customers. “We didn’t increase the gas bill last year because they are sharing dividends to stakeholders up to 20 per cent. By increasing their gas bills, the government has allowed ‘official and unofficial profit’ which is like robbery.”