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The Government’s subsidy for liquefied natural gas (LNG) procurement is slated to increase 27.27 per cent year on year to Taka 70 billion in FY ‘2024-25, beginning Monday 1st July.
This has happened despite the authorities hiking petrol tariffs at least five times in the last six years and the International Monetary Fund (IMF) advocating for the elimination of energy subsidies.
Nasrul Hamid, State Minister for the Ministry of Power, Energy, and Mineral Resources, recently informed parliament that the Ministry of Finance granted around Taka 55 billion in LNG subsidies in FY ’24.
He stated that the Government had spent more than Taka 262.15 billion on subsidies since launching LNG imports in 2018.
Bangladesh has been subsidising LNG purchases from the international market beginning fiscal year 2019, according to the state minister.
In FY ’19, the subsidy was Taka 25 billion. It rose to Taka 35 billion in FY ’20, followed by Taka 24 billion in FY ’21. The Government provided Taka 60 billion and Taka 63.15 billion in FY ’22 and FY ’23, respectively, Nasrul Hamid told the National Parliament.
According to official figures from the state-run Hydrocarbon Unit (HCU), Bangladesh’s cumulative LNG imports hit 23.265 million tonnes as of February this year.
A senior Petrobangla official stated that the Government’s LNG subsidy is projected to increase further as import and re-gasification expenses exceed the selling price of re-gasified LNG.
Following the recent increase in the country’s overall LNG re-gasification capacity, buying extra LNG volumes from the international spot market, in addition to purchases from normal long-term suppliers, will increase the LNG subsidies, according to the official.
The country’s total LNG re-gasification capacity from its two terminals increased by 10 per cent earlier this year, to roughly 1.10 billion cubic feet per day (Bcfd), up from around 1.0 Bcfd.