The Ministry of Power, Energy, and Mineral Resources decided to suspend gas connections to fertiliser factories run by the Ministry of Industries as the factories have incurred a substantial outstanding gas bill.
Information regarding this development emerged following a recent meeting held at the Bangladesh Secretariat, as revealed by officials familiar with the matter.
Officials seeking anonymity said the industries ministry is inclined to settle the gas bill based on the pre-June 2022 pricing, which stood at Tk 4.45 per cubic foot. However, the price escalated to Tk 16 per cubic foot in June of the following year, a rate the ministry appears reluctant to embrace.
Several meetings between Petrobangla and the Bangladesh Chemical Industries Corporation (BCIC) failed to reach any resolution.
Prime Minister Sheikh Hasina had issued directives for the immediate settlement of outstanding gas bills two months ago. Regrettably, the industries ministry is yet to comply with this directive, prompting the Energy Division to consider a temporary suspension of gas supply to fertiliser factories.
In June of the preceding year, the government implemented an average gas price increase of 22.78 per cent for consumers across all categories amid a severe energy crisis.
Fertilizer factories experienced the most substantial price hike, a staggering 260 per cent increase from Tk 4.45 to Tk 16 per cubic foot. This significant spike in prices drew widespread criticism, with concerns raised about potential disruptions in crop production.
The Bangladesh Energy Regulatory Commission (BERC) had assured at that time that the government would subsidise half the gas price to ensure the stability of fertiliser production.
However, the Ministry of Industries contends that the Ministry of Finance has not honoured this subsidy commitment.
An official present at the meeting said Energy Division Joint Secretary (Operation-2), Md Naeeb Ali, revealed that a letter was sent to the Ministry of Industries following the prime minister's directive to settle the gas bill with BCIC at the revised rate of Tk 16. Unfortunately, there has been no response from the industries ministry, leaving the Energy Division with no alternative but to consider suspending gas connections until the bill is settled.
Petrobangla Chairman Zanendra Nath Sarkar said that gas supply to the Ghorashal Palash Urea Fertiliser Company would continue as it is set to be inaugurated by the Prime Minister shortly. However, other fertiliser plants may face a more challenging situation.
Meanwhile, the Energy Division has instructed an assessment of fertiliser demand in the country and whether the suspension of gas supply would trigger production disruption. This assessment aims to provide a phased approach to any potential suspension, ensuring that all fertiliser plants are not shut down simultaneously.
Petrobangla currently supplies 139 million cubic feet of gas to seven fertiliser factories in the country against a demand of 316 million cubic feet, according to their reports.
