The government has decided to provide state-run Petrobangla with Tk 1,000 crore in credit to enable it to pay a part of outstanding amount in value-added tax and supplementary duty to the National Board of Revenue.
Petrobangla has been asked to use the money to pay its outstanding VAT and SD applicable on the gas supplied by the international oil companies in February- October this year, according to a letter issued by the Finance Division on December 6.
The government will realise the money with 4-per cent interest from Petrobangla in 15 years giving it a three-year grace period.
The Finance Division, in its letter, also asked Petrobangla to submit its audited financial statement with the amount of price-gap between its cost of supplies and earnings from the sales and other sources.
Petrobangla chairman Istiaque Ahmad on Wednesday told New Age that the amount of the government loan would enable the government-owned national oil company to pay a very small part of outstanding VAT and SD on behalf of the international oil companies.
Petrobangla owes the NBR Tk 13,278 crore in VAT and SD for the gas IOCs supplied to the national grid during July 2010 to January 2015, said officials concerned, adding that the NBR had been mounting pressure on Petrobangla to realise the dues. The amount is Tk 22,358 crore including interest on the outstanding VAT and SD.
The officials said that Petrobangla was not in a position to pay the entire amount of outstanding money as it ran on deficit due to high price it pays to the international oil companies in Bangladesh for the gas owned by the companies under production sharing contract.
Petrobangla buys natural gas and natural-gas condensate from the international companies in Bangladesh at a rate fixed in the production sharing contract and sells the gas at rate fixed by the Bangladesh Energy Regulatory Commission.
Under the contracts, Petrobangla is supposed to pay the VAT and SD to the NBR on behalf of the international oil companies.
The commission has decided to raise the prices of natural gas at the consumer level allowing Petrobangla to earn extra revenues to pay VAT and SD to the NBR on behalf of the international oil companies in Bangladesh.
The energy commission last time raised the prices of natural gas by 26.29 per cent on an average at consumer level with effect from September 1, 2015.
Petrobangla pays Tk 3,500 crore to Tk 4,000 crore a year to the government for the gas it supplied from the fields operated by its own subsidiaries, said the officials.
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