The government has decided to extend the term of the Gas Development Fund (GDF) for another 10 years and increase the scope of investment. In this regard, a gazette may be published this week, energy division sources said.
The Bangladesh Energy Regulatory Commission (BERC) has ordered the formation of a GDF for oil and gas exploration, development and reform to increase oil and gas production.
With the order to increase the price of gas on July 30, 2009, an additional charge of 48 paisa per cubic meter was imposed on consumers for GDF. This charge was effective from August 2009.
It was said in the public hearing that the state-owned companies could not implement the project in time due to the financial crisis. So, they will be able to take the project using this fund. The period of the fund is going to expire on January 31, 2022.
According to sources, some projects are underway with finance this fund, which will be completed by 2024-25. The period of GDF has been extended for another 10 years to address the uncertainty of these projects. There has been no major change.
However, initially there was a limitation to exploration and development. Bapex now has the opportunity to use this fund for rig reform. Besides, the representation of the ministry, the project approval committee has been made mandatory. Until then, these projects were approved under the leadership of Petrobangla.
Energy expert Professor Nurul Islam first raised the concept of GDF in the public hearing of BERC. He said local companies could not implement projects on time due to the financial crisis. And in the case of foreign lending, donors have different conditions and orders. Sometimes it disrupted the real purpose. The fund will be interest free, which will help to overcome the crisis quickly and consumers will get gas at affordable prices.
However, later it was imposed 4 percent interest for using the fund. It was said that in order to take any project financed by this fund, proper verification and selection has to be done and BERC prior permission has to be taken. Around taka 2.5 crore is to be deposited under GDF every year.
Consumer Association of Bangladesh (CAB) Energy Adviser Professor Shamsul Alam said that consumers are paying to form this fund. But they are not getting its actual benefit because it is not being utilized properly. If something goes wrong there will be no way but to go to court.
