Artificial system loss eats up Tk 4,000cr a year

Illegal gas connection is shown as the system loss of gas in the country that hits both the consumers as well as the state coffer.

According to experts, the market value of the huge system loss that Petrobangla shows every year is around Tk 4,000 crore.

The system loss at international level in terms of gas transmission and distribution is below 2 per cent while in Bangladesh it is on average 10 per cent annually.

By providing illegal gas connections, the government officials are showing a huge amount of gas loss, and there are allegations of embezzling crores of taka through this, opined Bangladesh Energy Regulatory Commission (BERC) and energy experts.

Even though legal customers do not get enough gas, they are forced to pay a lot. At the same time, mass people have to pay high price as LNG bought from abroad at high prices goes to illegal connections.

Energy expert Professor Shamsul Alam told The Business Post, “Many times system loss exceeds 14-15 per cent. But scientifically this rate is not more than 2 per cent. The extra that is shown is going to illegal connections.” “People are getting this gas and it is illegal. As a result the price goes to the pockets of corrupt officials.”

Thousands of crores of taka trapped in system loss

Officials concerned at the Petrobangla were contacted several times to know the natural gas system loss in the country but they refused to comment on the issue. However, Petrobangla sends gas system loss to BERC every year. According to the data, the total gas system loss in Fiscal Year 2019-20 was 10.10 per cent.

As a result, Bangladesh has lost 100 billion cubic feet of gas during this period.

At present, gas sells for Tk 12.60 per cubic meter. The government has lost about Tk 4,000 crore in Fiscal Year 2020-21. Petrobangla showed a system loss of 7.17 per cent.

According to a report by the UK-based company EDF Energy, gas system loss in European countries ranges from 1.5 to 2 per cent per year.

The same picture is in North America. According to the US-based International Energy Agency (IEA), the country’s gas system losses are below 2 per cent.

Abdul Jalil, chairman of BERC, thinks that even if Bangladesh’s gas transmission and distribution line is not as developed as that of Europe and America, it is not possible to lose 10 per cent of gas.

He told The Business Post no matter how many faults are there in transmission and distribution pipes, there is no chance of wasting more than 4 per cent gas in Bangladesh.

According to him, the system loss of gas is being shown at least Tk 5000 to Tk 6000 crore per year.

The report of the Anti-Corruption Commission has revealed a huge corruption in the distribution of gas in Bangladesh.

In its 2019 report, the ACC identified 22 areas of corruptions in Titas Gas Transmission and Distribution Company, the largest gas distribution company in country.

The report said Titas officials were bribed into giving illegal connections while there are meter tampering, non-payment of arrears, connection bypassing the meter, embezzling money by over-selling gas and collecting bills from illegal customers with fake signals.

According to State Minister for Energy, power and Mineral Resources Nasrul Hamid, the system loss of Titas Gas was 5 per cent last year. The state minister said this in the parliament about the huge loss of precious gas.

Talked, Petrobangla chairman Nazmul Ahsan said there has been irregularity in the gas sector for a long time. It takes time to fix everything. Due to illegal gas connections, many power plants and consumers do not get sufficient gas supply.

“We are operating mobile courts against illegal gas connections. Hope the situation will be ok very soon,’’ Nazmul told The Business Post.

Titas takes Tk 2,000 crore without gas

On one hand, the country’s six gas distribution companies are showing system losses through illegal connections, and on other hand, they are charging legal customers without gas, energy experts said.

The Titas authorities say at present their residential customers are 28 lakh 46 thousand and 419.

Among these, 2 lakh and 12 thousand customers have received prepaid meters.

Research has shown that a customer with a prepaid meter uses 45.50 cubic feet of gas per month.

If the price of gas per cubic meter is Tk 12.60, the monthly bill of customer is Tk 567. On the other hand, the postpaid customers have to pay Tk 975 for two stoves.

Considering the equivalent of prepaid customers, each of the postpaid customers is supposed to consume 77.36 cubic meters of gas per month. But in reality, they use less than half of it, according to industry insiders.

The BERC says installing a prepaid meter will save 33 cubic meters per stoves, or about 53 BCF of gas per year. Its market value is more than Tk 2,000 crore.

An official of the energy department told The Business Post although the government had planned to install prepaid meters a long time ago, it was not happening due to corruption in the distribution companies.

He said on condition of anonymity a few powerful syndicates of distribution companies prevent the implementation of prepaid meters in many ways.

Titas Gas Managing Director Harunur Rashid Mollah could not be reached for comment in this regard.

Loss in high cost LNG

Petrobangla says the gas demand in country is increasing every year. The housing, power and industrial sectors use 1 tcf natural gas a year, the value of which is Tk 43,000 crore.

72 per cent of this gas is met from own gas fields. The 600 million cubic feet LNG is being imported daily, the value of which is about Tk 20,000 crore.

In other words, a very little amount of gas is imported from abroad, and its price is about half the total gas price of the country.

The price of LNG has increased to $ 40 per million British thermal units (MMBTU) in the spot market this year. As a result, Petrobangla has already sought Tk 30,000 crore to buy LNG. This means, the price of 28 per cent of imported gas will be more than the price of 72 per cent of the country’s gas.

The government is increasing the pressure of subsidies in the energy sector due to the impact of additional expenditure. Unable to tackle, the government is repeatedly proposing to increase gas prices.

However, a large part of this precious gas is being stolen at the stage of transmission and distribution in the country.

Energy expert Professor Badrul Imam said, “We have repeatedly said we need to increase our own gas exploration and extraction but the government is moving towards imports.”

“However, the officials of the distribution company are cashing in on illegal connections.”