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Huge Gas Bill Arrears

Petrobangla seeks cabinet help

Rejaul Karim Byron
Petrobangla has turned to the Cabinet Committee on Economic Affairs to recover its arrears of gas bills worth Tk 697 crore from 30 government entities, including a number of ministries, and three autonomousinstitutions.
In a request, which will be tabled before the committee today, Petrobangla says the delays in payments have put it into a comer, as it has to pay millions of dollars every
month to international oil companies to purchase gas.
The state oil and gas authority complains a dearth of funds has also stalled some of its urgent gas-related development projects. If the arrears were cleared, Petrobangla adds, it could start some gas exploration and development work.
Petrobangla says it has written several letters to the defaulters to pay up the bills without any positive reaction. FROM PAGE 1
Of the 33 defaulters. Power Development Board (PDB) owes Petrobangla the highest.Tk395 crore, followed by Bangladesh Chemical Industries Corporation (BCIC) which hasTk 174 crore in dues.
zlmong those who owe more than Tk 5 crore are jute ministry with a debt of Tk 5-1 crore, public works ministry Tk 26 crore, home ministry Tk 8.48 crore and Bangladesh Steel and Engineering CorporationTk6.83 crore.
Communications ministry owes it Tk 4.89 crore, education ministry Tk 4.22 crore, health ministry Tk 4.24 crore, telecom ministry Tk 2.9 crore, agriculture ministry Tk 1.76 crore, civil aviation ministry Tk 1.40 crore, local government ministry Tk 1.24 crore and forest and environment ministry 1.26 crore.
Interestingly, finance ministry that receives over Tk 3,328 crore a year in revenues from Petrobangla owes itTk4.52 crore.
Among die autonomous institutions the Dhaka University owes it Tk 1.18 crore, Bangladesh University of Engineering and Technology (Buet) Tk 72 lakh and Dhaka City CorporationTk70 lakh.
The rest of the defaulters including the ministries of fisheries, land, water, information, shipping, Liberation War affairs and industries, Dhaka Water and ScweragezXulhority (Wasa) and Rajdhani Unnayan Kartripakkha (Rajuk) each owe Tk 1 crore or less to Petrobangla.
In the letter, Petrobangla notes the arrears almost equal the Tk 872-crore allocation it has received under the Annual Development Programme (ADP), and adds it is now unable to pay the Vat (value-added tax) and supplementary duties to the government.
Petrobangla last year paid Tk 1,823 crore in Vat and supplementary duties, Tk 322 crore for debt service liability, Tk 175 crore as dividend. Tk 162 crore in income tax and Tk 39 crore in customs duties.
A PDB official explains why the power board, which consumes more than one-third of Petrobangla-supplied gas, is the biggest defaulter, "We sell power to Dhaka Electric Supply Authority (Desa) that does not pay us regularly and in full. The Desa now owes us over Tk 4,000 crore in arrears and we have sought the power ministry’s direction in this regard many times. But there has not been any remedy."
A Desa official on the other hand complains, without specifying figures, a number of government agencies owe it hundreds of croresof taka.
Defending his organisation's large default, a BCIC official says the corporation uses the gas to produce fertiliser. The government fixes the price of fertiliser nt a level much lower than its production cost. For example, the production cost of a tonne of urea fertiliser stands at Tk 6,000 while the BCIC sells It at about Tk 4,800. The government is supposed to fill in this gap with subsidy, but it never does. As a result, the BQC has become a defaulter.
He says the BCIC has written to the finance ministry many times asking for the subsidy, but there has been no response from the ministry in the last couple of years. "We have told Petrobangla that as soon as we receive this (subsidy! fund, we will payup thebills."
A Petrobangla official says the use of gas saves the country over Tk 12,000 crore in foreign exchange. Presently pine affiliates of Petrobangla are fulfilling 80 percent ofthecountry’senergyneeds.