Energy division has finalised a draft policy for the Energy Security Fund limiting its to 20 years and empowering the government to decide its fate after the expiry of the tenure.
Following a public hearing, the commission in September 2015 established the fund by increasing gas prices by Tk 1.01 per cubic metre to support the government programmes in securing supplies of natural gas and petroleum gas. The fund is now growing at the rate of more than 2,550 crore per year.
The fund will have a 20-year tenure from the date of the framing of the policy and the government will decide about its fate on the expiry of the tenure, said Clause 6 of the draft policy sent to the prime minister on January 22 for approval.
Asked why the government, instead of the commission, would be empowered to decide the fate of the fund after the expiry of the tenure, an energy division official said that the commission was there to regulate the energy sector, not to maintain a fund.
Consumers Association of Bangladesh energy adviser M Shamsul Alam said that it was an unlawful
exercise of the energy division and completely ignored the consumers’ right to decide the operation of the fund created with their money.
The commission is the sole authority to decide the tenure of the fund through public hearing, he said.
Energy commission member Md Abdul Aziz Khan declined to comment.
The fund will be used in the import of Liquefied Natural Gas, construction and maintenance of import infrastructures, exploration, transmission and distribution of natural gas by companies under Petrobangla, the draft said.
Import and supply of Liquefied Petroleum Gas will get priority following import, exploration and supply of natural gas in getting the fund, it said.
An eight-member committee headed by the Petrobangla chairman will select projects eligible to get the fund while the energy commission will receive a copy of the list of projects approved by the energy division, said the draft.
The companies would need to repay the fund in 20 instalments with 1 per cent interest in 15 years with a five-year grace period.
The draft policy, however, exempted the gas companies from the repayment if an exploration attempt was failed.
Petrobangla would get about Tk 7,000 crore as a revolving fund to import expensive LNG to increase gas supplies by 500 million cubic feet per day, the energy division official said.
Petrobangla would not need to refund the money until it restores its financial strength as it would
need to run on deficit for at least six-seven years for importing LNG at a much higher price than the price at which it would sell, he said.
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