Budget Wing under Energy and Mineral Resources Division (EMRD) has requested the finance division to hold an inter-ministerial meeting on book adjustment as Petrobangla has failed to pay value added tax (VAT) and supplementary duty (SD) for several years due to fund crunch.
The state-owned company has become unable to pay dues of Tk 20,033 crore to Large Taxpayers Unit (LTU), VAT under the National Board of Revenue (NBR), said a memorandum letter prepared by EMRD for the senior secretary of the finance division.
Petrobangla does not have enough funds as its income is low. It imports expensive liquefied natural gas (LNG) with subsidy, and incurs huge annual losses due to “so-called” system loss and corruption, according to its officials.
“In view to the recommendation of the DO letter issued by the NBR, EMRD on September 23, 2020 made request for necessary allocation of funds in favour of Petrobangla or payment through book adjustment, but no step has yet been taken by Finance Division,” the letter reads.
“LTU is continuously requesting Petrobangla to resolve this matter quickly,” it added.
At the 38th meeting, the parliamentary standing committee on the Ministry of Power, Energy and Mineral Resources was informed about necessary measures to reconcile all dues of Petrobangla to LTU VAT on the price of gas sold as per the decision taken at inter-ministerial meetings, it said.
In a meeting held on March 14, 2017 with the former finance minister in the chair, it was decided that after completing the audit by the Office of the Comptroller and Auditor General, Finance Division would take necessary measures to clear outstanding dues through book adjustment.
However, some corrupt officials of Titas Gas Transmission and Distribution Company Limited are costing the government about Tk 4,000 crore per year as they show artificial system loss by giving illegal gas connections, according to Bangladesh Energy Regulatory Commission (BERC).
These officials also charge the consumers unspecified amounts of money--as high as Tk 1.5 lakh--for new but illegal connections, according to BERC.
Petrobangla, also known as Bangladesh Oil, Gas and Mineral Corporation, is the country’s main authority that explores, produces, imports, transports, manages and sells all types of mineral resources through its entities and international oil companies. Titas operates under it.
According to Petrobangla, NBR charges 15 per cent VAT on LNG imports and another 15 per cent VAT during the transmission and distribution phase when LNG is fed to the national grid.
Petrobangla officials say the company has failed to pay VAT and other taxes to NBR as it is under huge financial pressure while importing LNG since 2018. Since the company emptied its funds by importing LNG, the Ministry of Finance is now subsidising import costs, they said.
