The government has decided to waive 93.24 per cent supplementary duty on natural gas after it would begin to import Liquefied Natural Gas from late 2018.
The government would, however, continue to charge 28.986 per cent value added tax on natural gas regardless of the source, domestic gas fields or imported LNG, said energy division officials.
The National Board of Revenue on June 12 issued a letter to energy division of the power, energy and mineral resources ministry in this regard, they said.
State minister for power and energy Nasrul Hamid told New Age on Sunday that they received the letter which confirmed that the revenue board would not charge supplementary duty on natural gas from the day the government would begin to import LNG.
People now pay 122.22 per cent extra money – 93.24 per cent supplementary duty and 28.986 per cent VAT – on natural gas supplied from the domestic gas fields, the officials said.
Nasrul said that the waiver of supplementary duty would help to keep lower the price of natural gas at a certain level after the beginning of LNG imports.
He, however, said that import of a 1,000 million cubic feet LNG per day would increase average gas supply cost significantly even after the waiver of the supplementary duty.
Asked about the impacts of LNG imports on gas tariff, the state minister said that it would affect the CNG sector a little as a small rise in CNG price would be needed while a major rise in gas prices would be required for power stations and for industrial units.
He said that the consumers would receive uninterrupted gas supplies which would ultimately enable them to pay the higher prices for gas.
Petrobangla, the state-run Oil, Gas and Mineral Resources Corporation, now supplies about 2,750 million cubic feet natural gas per day from 20 domestic gas fields.
The supply is at least 850 million cubic feet less than the daily demand, said the energy division officials.
The government is now negotiating a long-term agreement with Qatar’s state-owned RasGas to import 3.75 million tonnes of LNG per year.
US-based Excelerate Energy and local Summit Group are preparing for installation of two floating LNG terminal and regasification units at Maheshkhali in Cox’s Bazar to receive imported LNG and supply natural gas at a rate of 500 million cubic feet per day from each of the two facilities.
The LNG facilities are expected to be completed by the end of 2018, according to the contracts signed with the two companies.
The revenue board issued the letter after the energy division requested it to waive the burden of taxes on the grounds that the imported LNG would multiply the average gas supply cost which would be further raised by the tax measures like supplementary duty, VAT, advance income tax, corporate tax and so on, said the officials.
They, however, said that the last time the prices of natural gas was increased by 22.7 per cent this year to increase the government’s revenue earning by Tk 41.85 billion per annum.
With the latest price hike on June 1, 2017, the government has increased the prices of natural gas by 137.50 per cent to 204.89 per cent for domestic cooking, 50.48 per cent for grid-tied power plants, 220.67 per cent for captive power plants at industrial units, 85.20 per cent for industrial boilers, 91 per cent for fertiliser factories and 138.81 per cent for CNG-run vehicles since 2009.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Country