The Consumers Association of Bangladesh (CAB) has proposed 11 points for bringing about reforms in power sector to control the unscrupulous traders and protecting the consumers’ energy rights.
The organisation made the proposal at a civic meeting held at the National Press Club in the capital on Thursday.
CAB organised the meeting to present alternative proposals to address the fiscal deficit in the power and energy sector without hiking its prices. The cover of the book titled 'Bangladesh Energy Transformation Policy (Proposed)' published by CAB was unveiled at the event.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid dwelt on the proposal of power sector reform and said, "The initiative of CAB is good, I have gone through the proposals partially. But you can give more constructive proposals so that it comes in handy. We need to consider whether it can be made a little more modern. What will happen if we stop importing 800 million cubic feet of gas tomorrow? All industries will be shut down. Shall we shut down the industries?”
Nasrul Hamid said, "The issue of electricity and gas prices is now in the hands of the Energy Regulatory Commission. All I can say is that the Prime Minister will not do anything to become a burden for the people.”
Speaking as the chief guest, the state minister said, "Our goal is set, for whom we want to subsidise, how much we want to keep the price. We do not have the capacity to pay for electricity to a large population. So, subsidies are given, but I don't say subsidies, I say investments. Because, they can use this money for their own development. You can spend it on educating your children. We are self-sufficient in food even during Covid-19 pandemic because we are subsidising in fertiliser.”
The state minister said, "We are paying Tk 30,000 crore tax on LNG. If we don't pay this tax, it will be saved. Besides, we can save Tk 20,000 to 25,000 crore in electricity if we don't have to pay tax. We are working to provide uninterrupted power.”
Regarding the exploration activities of the new gas well, the state minister said, "Even after conducting the survey, gas is often not found by drilling. Many people think if they go to sea, they will get gas tomorrow. Such an idea is not correct, even if you get gas, it will take 10 years to bring it. A multi-client survey is being conducted in the sea, then we will consider if it will be affordable. The demand for gas is increasing. New industrial factories are being set up. Applications for 550 to 600 industrial connections are still lying. We want industry to increase employment.”
“Currently, it costs Tk 59 per unit to import gas, whereas we are selling it at Tk 7 only. Italy has shut down the AC because of the crisis,” he added.
Regarding coal mining, the state minister said, "What will happen if we produce coal from land? Crop production will decrease. That is why coal production has been stopped. A small amount is being lifted.”
CAB President Golam Rahman said, "We hope the government will not be stingy in working for people’s welfare. What we see, there seems to be a lack of frugality. If the expenditure was kept at a reasonable level, it would have saved a lot.”
At the meeting Professor M Shamsul Alam, vice president of the CAB raised an alternative proposal to address the financial deficit without raising the price of electricity and gas.
According to CAB's alternative proposal, the accumulated net profit of the distribution and transmission licence is about Tk 14,395 crore. Such profits are inconsistent with the Bangladesh Energy Regulatory Commission (BERC) Act and are predatory. Reducing gas theft could reduce LNG imports by 63 million cubic feet per day. Subsidies can be greatly reduced if thefts could be stopped, and advance income tax is withdrawn. In all cases, there is no need for giving subsidies or price hikes if plundering is stopped. Instead, there is an opportunity to reduce electricity price at Tk 0.16 per unit.
In the alternative proposal, it is said that if the combined cycle power plants are run at the rate of 70 percent, the net power generation will increase to 412 crore units. After the reduced gas adjustment, the net cost increased to 2,308 crore cubic feet. On the other hand, if the furnace oil plant is reduced by 5 percent, Tk 5,473 crore can be reduced. If new taxes are not imposed on bulk electricity, Tk 2,149 crore will be saved. Withdrawal of duty exemption on Furnace Oil at the import stage has resulted in an increase of Tk 6,897 crore. If the inconsistency of bulk prices is eliminated, the deficit of Tk 11,905 crore can be reduced.
“PDB is earning 3 percent, public companies 12 percent and jointly- owned companies are earning 16 percent profit on equity. By BERC's standard, the profit should not be more than 7 percent. It can save cost by reducing the profits,” according to the CAB proposal.
Energy expert Badrul Imam said “The root cause of today's energy crisis is due to the import of costly LNG. We are importing LNG from the spot market and under a long-term contract. Prices have risen in the spot market. If we could properly extract and explore gas, we would not have to import LNG from the spot market today.”
General Secretary of CAB Humayun Kabir Bhuiyan, Architect Mobasher Hossain, Professor Tanjim Uddin Khan, Professor M M Akash and others took part in the discussion.
