Power stocks hard hit as diesel run plants shut down

Power stocks came under pressure from the latest decision on suspending operations of diesel-run power plants.

The market witnessed negative fallout of the decision, generating nervous selling from all quarters.

Shares of all the power-producing companies were down on Tuesday, a day after the government decided to shut down operations at diesel-run power plants in wake of the skyrocketing prices of fuel oil amid the war in Ukraine.

Out of the 23 companies listed in the fuel and power sector, eight are involved in power generation.

Worries caused a broad pullback in stocks of Summit Power, United Power Generation and Distribution Company, Baraka Power, Baraka Patenga Power, Doreen Power, Shahjibazar Power, GBB Power, and Khulna Power Company Limited.

According to the Dhaka Stock Exchange, the power sector’s return was negative 1.35 per cent on Tuesday.

Summit Power and Shahjibazar Power stocks have been hit-hard as their shares were down 1.92 per cent each, followed by Doreen Power 1.90 per cent, Baraka Patenga Power 1.88 per cent, GBB Power 1.85 per cent, Baraka Power 1.72 per cent, Khulna Power Company 1.69 per cent and United Power Generation and Distribution Company Limited 0.49 per cent.

Meanwhile, the benchmark DSEX index plunged 63 points or more than 1 per cent to settle at 6,153.

The DSE turnover stood at Tk 319 crore, the lowest since April 5, 2021 as investors lost buying appetite on most of the equities.

According to the Power Development Board’s estimates, gas fuels make up 50.84 per cent of the total power generation, furnace oil 28 per cent and diesel 6 per cent, while coal-fired plants generate 7.89 per cent of the country’s electricity.

To offset the power shortage, the government set to ration electricity through rolling power cuts for up to two hours every day. The new load shedding regime started on Tuesday. Electricity distribution companies announced area-wise timetables for outages. The decisions were made during a meeting at the Prime Minister’s Office on Monday.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid on Monday said the diesel-fired power plants will remain closed until further notice and petrol pumps will stay closed for one day every week to save fuel.