Photo: Collected
Irregularities and corruption persist within the power and energy sector. Despite government efforts, system losses remain unchecked. Officials and employees of various sector-related institutions continue to engage in corrupt practices, with the government shifting the burden of their crimes onto consumers.
According to sources, the government has incrementally raised prices for gas, electricity, and fuel over recent years, sparking public discontent. Meanwhile, various donor organisations have been consistently pressuring the government to lift subsidies in this sector.
It has been learned that the government intends to phase out all subsidies in the power and energy sector within the next three years, following advice from the International Monetary Fund (IMF). Officials from the Power and Energy Division presented this plan during a meeting on Thursday with the visiting IMF delegation in Dhaka. Officials from the electricity department stated that prices would be raised gradually to avoid shocking consumers. Additionally, they mentioned that gas subsidies would also be phased out gradually.
During the meeting with Finance Ministry officials, the IMF delegation also asked the government to gradually reduce subsidies on electricity, gas and fertilisers. The government has raised electricity and gas prices several times since entering the IMF’s $4.7 billion loan program in January last year.
In this regard, Golam Rahman, President of Consumer Association of Bangladesh (CAB) told The Daily Messenger that the government is going to increase the price of electricity and other fuels to protect the interests of some unscrupulous traders. He also said that if the government stopped irregularities and corruption, there would be no need to give subsidies in this sector.
He also said that the government has many achievements in the energy sector but has failed to take proper decision on time. As a result, the consumer has to take responsibility for it. According to the IMF, it is possible to reduce the subsidy without increasing the price of gas-electricity if the energy sector can be prevented and transparency is ensured.
Government subsidies on electricity, gas, and fertilizers have nearly doubled since the fiscal year 2022-23. The subsidy allocation in the current fiscal year budget stands at Tk 84,542 crore, with a similar amount expected to be allocated in the next year's budget. For the current financial year, the subsidy on electricity amounts to approximately Tk 35,000 crore, while gas subsidies total around Tk 6,500 crore.
A senior official from the power division informed The Daily Messenger that the finance division has provided bonds and cash amounting to approximately Tk 19,000 crore to the power division in the current fiscal year. However, as of January, the outstanding bills amounted to around Tk 60,000 crore. The official further mentioned that despite the increase in electricity prices, a subsidy of Tk 7-8 per unit of electricity still needs to be covered.
Meanwhile, the government has implemented an automatic price adjustment system for fuel oil as part of its commitments. Additionally, it has raised electricity and gas prices in order to reduce subsidies and financial losses. However, despite these measures, there remains a significant disparity between government expenditure and revenue in the power and energy sector. Consequently, substantial subsidies are still required to cover the financial losses incurred by this sector.
In this regard, CAB’s energy advisor M. Shamsul Alam said, “The development of the sector is continuing under the non-competitive private sector investment under the Electricity and Energy Fast Supply Act 2010. In that, investors are taking advantage of predatory profits by increasing the cost of electricity and energy supply as per their wishes. As a result, financial deficit is increasing rapidly.”
“With that, both prices and subsidies are increasing. Deficit cannot be brought under control.”
He also said that the government is now desperate for a loan of $4.5 billion and is running after the IMF. It is no longer important for the government to ensure the interests and welfare of the people as well as energy security. So, consumers are in dire straits.
Energy expert Professor Dr. Ijaz Hossain said, “I will pay the price of electricity and fuel that the government increases. But the theft and waste in it-- why should I take the responsibility? No fuel, yet power plants are being built. Why the IMF-World Bank does not investigate irregularities? In Bangladesh still 30 percent furnace oil is being used to generate electricity. But nowhere in the world it is more than 5 percent.”
Messenger/Disha
