Home ›› 03 Oct 2022 ›› Front
Citing financial losses, two state-owned energy corporations and their subsidiary companies are hiking the fuel and gas prices repeatedly even though they have a profit of nearly Tk 75,000 crore deposited in their bank accounts.
A total of 25 state-owned entities operating under PetroBangla and Bangladesh Petroleum Corporation (BPC) altogether have deposited the fund over the past few years. But whenever fuel prices went up, it claimed the main reason behind the moves was to minimise losses.
At the same time, Petrobangla — officially named Bangladesh Oil, Gas and Mineral Corporation — is not taking enough steps to explore gas reserves in the country when the sector is facing a severe shortage.
The recent fuel and gas tariff hikes have left people in much financial trouble as they gradually pushed up the prices of commodities as well. The gas crisis is impeding the overall production of all relevant industries.
However, according to a financial statement of the Finance Division seen by The Business Post, each of the 25 companies operating under the Energy and Mineral Resources Division (EMRD) is making profits and their total deposit is Tk 74,611.7 crore. EMRD sent the statement to the Finance Division recently.
The data showed that Tk 31,939.20 crore was deposited in the accounts of BPC, which is the highest amount among the energy sector entities.
Of the BPC subsidiaries, Eastern Refinery Limited (ERL) has a deposit of Tk 47.73 crore, Padma Oil Company Tk 4,916.86 crore, Jamuna Oil Company Tk 3,202.4 crore, Meghna Oil Company Tk 5,040.4 crore, Standard Asiatic Oil Company Tk 82.35 crore, Eastern Lubricants Blending Tk 45.18 crore, LP Gas Limited Tk 74.21 crore, and other petroleum-related enterprises have a deposit of Tk 267.54 crore.
Meanwhile, the government claims that Petrobangla’s fund has emptied due to liquefied natural gas (LNG) importing but the statement showed the corporation has Tk 14,630.4 crore deposited in its accounts.
Of the Petrobangla subsidiaries, Bangladesh Gas Fields Limited (BGFCL) has a deposit of Tk 1,833.4 crore, Sylhet Gas Fields Limited Tk 1,813 crore, Titas Gas Transmission and Distribution Company Limited Tk 3,963.62 crore, Bakhrakhabad Gas Systems Limited Tk 859.13 crore, Jalalabad Gas Transmission and Distribution Company Tk 971.9 crore, Rupantarita Prakritik Gas Company Limited Tk 507.18 crore, Bangladesh Petroleum Exploration and Production Company (BAPEX) Tk 1,384.98 crore, Gas Transmission Company Tk 878.55 crore, Barapukuria Coal Mining Company Limited Tk 734.18 crore, and Madhyapara Granite Mining Company Limited has a deposit of Tk 215.49 crore.
Moreover, Paschimanchal Gas Company Limited has a deposit of Tk 451.44 crore, Kornaphuli Gas Distribution Company Limited Tk 513.10 crore, and Sundarban Gas Distribution Company Limited Tk 308.16 crore. There is also a deposit of Tk 1,230.82 crore from other enterprises related to Petrobangla.
Finance Division sources said BGFCL recently sent an application to the Finance Ministry for a liquidity certificate in favour of a project for the drilling of four wells and workover of seven wells in Titas, Habiganj, Kamta, Bakhrabad and Meghna gas fields.
The Finance Division sought the financial statements of EMRD-related institutes and did not issue the liquidity certificate as BGFCL had sufficient funds.
Money for development projects?
According to the Finance Division statement, BPC and its seven subsidiaries have a total of Tk 45,624.17 crore deposited in the banks. Despite having that much funds, BPC has raised fuel prices twice in the past year.
On August 6, BPC raised the diesel, petrol, octane and kerosene prices by 42-52 per cent, which caused major suffering at every level of the economy and among common people amid rising inflation.
As widespread criticism ensued regarding the funds in its bank accounts, BPC claimed the money was held for various development projects.
The corporation said Tk 20,000 crore has been earmarked as the construction cost ERL Unit-2 in Chattogram. However, the project is yet to be cleared by the government despite being discussed many times over the past 12 years.
Due to its low capacity to refine crude oil, BPC imports three-quarters of the domestic demand for refined oil. BPC itself says it costs an additional $1 billion annually.
BPC Chairman ABM Azad told The Business Post that BPC and its companies are governed by different laws and their financial management is managed separately.
“The money has been kept aside for the companies’ own needs,” he added.
Bureaucracy delays initiatives
According to the Finance Division statement, Petrobangla and its 13 companies have a total of Tk 28,986.9 crore deposited in the banks.
Despite that, Petrobangla is not taking any vigorous initiative in domestic oil and gas explorations. In the meantime, power plants are sitting idle and the industry is suffering due to the ongoing shortage of natural gas.
Analysing the financial statement of Petrobangla, energy expert and geology professor Badrul Imam pointed out that bureaucratic mismanagement is the major problem in domestic oil and gas exploration.
He said that money is not the problem. “If Petrobangla wants to take an initiative, EMRD takes a long time to take even a small decision. This delays the whole process. BAPEX can’t do anything alone when it comes to gas exploration.
The Business Post tried to reach Petrobangla Chairman Nazmul Ahsan for comments but he was unavailable.
Although considering the extreme gas shortage, Petrobangla recently took the initiative to drill 46 gas wells in the next three years.
The government hopes to increase gas production by 618 million cubic feet per day within 2025 if this initiative is successful.
