Govt out of gas, mostly

Aminur Rahman Rasel
bdnews24.com Correspondent

Dhaka, Dec 31 (bdnews24.com) – If the decision to raise fuel prices -- for the fourth time this calendar year – barely two days before the year checks out had any deeper subtext, it showed the government's breakdown on the energy front in the outgoing year.

While energy is considered one of the main factors for a developing economy, Bangladesh was neck-deep in crisis on this front in 2011.

The government reasoned that oil prices had to be raised to adjust subsidies given to rental power plants, set up as a desperate move to boost electricity production.

Oil, however, was not the only energy source whose prices headed northward this year. CNG prices, too, were raised twice this year, raising criticism about the energy sector, which is under prime minister Sheikh Hasina's supervision.

The result: already hard pressed, the economy had to bow down further as the government borrowed more from banks to meet fuel import costs.

Meanwhile, the Awami League failed to fulfill its campaign pledge to enact a national coal policy even in the third year of the government's tenure.

Entrepreneurs in the housing and real estate sector were also up in arms after the government failed to meet their demand to roll back its decision to stop gas lines to residences from July 2009.

Further, the government has been criticised for a production-sharing contract (PSC) with US oil-gas giant ConocoPhillips to explore gas in two blocks in the Bay.


OIL-GAS PRICES

Following the last round of hike, effective Thursday midnight every litre of diesel, octane, petrol, kerosene and furnace oil was dearer by a further Tk 5.

In a statement issued on Thursday, the government cited hefty subsidies to the fuel sector, rise in international oil prices and depreciation of dollar against taka as reasons for the price hike.

"The government will face a huge loss due to the import of fuel oil," the statement read. "Therefore, it is tough for the government to further subsidise the fuel sector from the current earnings."

Following the hike, price of diesel per litre works out to be Tk 61, octane would cost Tk 94 per litre, petrol Tk 91, kerosene Tk 61, while furnace oil can be had for Tk 60 per litre.

The fuel prices were raised by Tk 5 per litre only last month -- Nov 10 to be precise -- for the third time this year, and the second in the current fiscal.

Before that, prices were raised on Sep 18 -- furnace oil went dearer by Tk 8 per litre while it was Tk 5 for all other fuel. That round of hike was preceded by one on May 5.

Price of CNG, meanwhile were raised twice, on May 12 and Sep 19: it zoomed from Tk 17 per cubic metre to Tk 30 per cubic metre.

The hikes in fuel and gas prices led to further increase in transport fares and prices of essentials.

The effect in the transport sector was almost immediate: bus fare was raised by Tk 0.5 per kilometre in October following discussions with transport owners, while CNG-run autorickshaw fare was raised by Tk 0.14 per kilometre.

Fare of long distance buses went up from Tk 1.15 per kilometre to Tk 1.2. In Dhaka and Chittagong, revised bus fares were up to Tk 1.6 per km and Tk 1.5 for the equal distance for minibus.

Fare for the first 2 km in CNG-run autorickshaws was kept at Tk 25 but for further travel, commuters had to shell out between Tk 7.5 and Tk 7.64 each extra kilometre. Fare for recesses was, meanwhile, raised from Tk 1.3 to Tk 1.4.

Quick to read public mind and grasp the issue, opposition BNP and its allies enforced a dawn-to-dusk shutdown across the country recently to protest the price hikes.


DEAL WITH CONOCOPHILLIPS

The government signed a PSC with ConocoPhillips on June 16 to explore oil and gas in deep-sea blocks number 11 and 12 with an area of 5,158 square kilometres.

According to the National Committee on Protection of Oil and Gas, Mineral Resources, Power and Ports, the deal authorised the US firm to sell 80 percent of gas it would lift from the deep-sea blocks to Bangladesh while the country will face a loss to carry inland the rest of it.

The contract authorizes the US firm to export gas if Bangladesh fails to buy it.

The wells in the country supply 2 billion cubic feet gas every day -- against daily demand of 2.5 billion cubic feet.


COAL POLICY

One of the major pre-election pledges of the Awami League was to enact a national coal policy to safeguard national interest. But three years on, the policy is yet to be finalised.

Amid debates, a 15-member committee led by former chairman of Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) Mosharraf Hossain was formed on Sep 8 to give proposals to finalise the policy. The panel had been asked to submit proposals within four months but its activities so far has been only one meeting on Oct 12.

Tawfiq-e-Elahi Chowdhury, the energy advisor to prime minister Sheikh Hasina, and state minister for power, energy and mineral resources Muhammad Enamul Huq have, meanwhile, announced at several programmes that the policy will be declared soon.


LIMITED SUCCESS OF BAPEX

In the midst of the raging gas crises, Bangladesh Petroleum Exploration and Production Company Limited (BAPEX) brought some cheers by exploring gas.

It started supply from a new well in Semutang Gas Field from Dec 4. The well supplies 15 million to 18 million cubic feet gas to Chittagong daily.

On Dec 10, Salda Gas Field started supplying 25 million cubic feet gas daily, while the development of Fenchuganj Gas Field is on.

International firms, though, failed to show any major achievement.

Chevron Bangladesh dug three wells in Moulvibazar Gas Field but no gas was found from two of the wells, while the third well is still uncertain.

Santos Bangladesh started digging a well in deep-sea block no. 16 but abandoned the well later due to heavy pressure of water.

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