Govt allocates Tk 2,000cr from gas dev fund for LNG import

The finance ministry has likely been in breach of law by offering Tk 2,000 crore as a loan to the Petrobangla for importing liquefied natural gas (LNG).

The money is a part of a fund known as gas development fund (GDF) that was created for exploration and development of the natural gas in the country.

This GDF was formed with the proceeds of gas utility consumers across the country. Therefore, if the government wants to use this fund, it has to be done by holding a public hearing, energy experts said.

But without soliciting endorsement of the constituents, the finance ministry cannot allocate the fund to other purposes, they added.

“The whimsical decision of fuel import has created today’s crisis. So, the government has become desperate to handle it. This initiative is a violation of the Energy Regulatory Commission (BERC) law,” Prof Shamsul Alam, an energy expert, told Business Insider Bangladesh on Thursday.

He said: “This expensive import-based solution will not work to resolve the crisis. Moreover, the government will face more crises.”

He further said, “Besides, currently we are facing a dollar shortage. So, the taka will not be able to mitigate the problem,” he noted.

Another expert said Bangladesh needs her own natural gas or fuel to resolve such a crisis.

“This fund is meant for developing gas wells and exploring natural gas across the country,” Mokbul E Elahi, Member (Gas) of BERC, said.  

He told Business Insider Bangladesh that without having “our own primary fuel, energy reliance of the country cannot be ensured.”

The Finance Division of the finance ministry in a meeting allocated the loan to Petrobangla, a government-owned national oil company, on July 6, this year.

Since then the energy experts of the country have been opposing the decision. They also questioned the legitimacy of the finance division’s decision over the GDF as it was formed by the BERC law.

Aiming to develop the gas sector of the country, Bangladesh Energy Regulatory Commission (BERC) formed a Gas Development Fund. And, the commission also instructed the consumers to deposit a certain amount to the fund.

Moreover, without taking initiatives to develop the energy sector of the country, the finance division emphasised on fuel import. As a result, fuel and power are getting costlier, experts said.