Special Correspondent:
The government is hesitant to choose the right option to reduce the gap between the generation cost of electricity and revenue from sales. A top official at the state-owned Bangladesh Power Development Board (BPDB) said, “Top policymakers are divided on whether the government should raise electricity prices further or issue more bonds through the banking system. He said, if the government wants to increase the price of electricity, it should be done either before Ramadan or after Ramadan – these are being discussed at the policy-making level almost every day. They are also analyzing the implications of floating more bonds to reduce the burden of mounting losses on the part of BPDB, he added. According to government sources, currently the production cost per unit of electricity is around 12 taka whereas it is sold at around 6 taka 7 paisa. This means that the government has to face a loss of 5 taka 3 paise per unit. BPDB’s annual report for the financial year 2022-23 shows that as a single buyer, BPDB has produced 87 thousand 24 million kilowatt hours of electricity at a total cost of 98 thousand 646 crore 42 lakh taka in this financial year. Its production cost per unit was Rs 11 33 paise. Its production cost per unit is 11 taka 33 paisa and per unit cost of selling electricity is 6 taka 70 paisa, the loss is about 4 taka 63 paisa. Last year, in January last year, the wholesale duty was increased by 8.06 percent from 6 taka 20 paisa to 6 taka 70 paisa per unit. It came into effect from February of the same year. Against this, the revenue was Tk 50,858,250,000, and the loss was Tk 47,788,170,000, BPDB’s annual report showed. With this huge loss, the government is in big trouble as it has to buy electricity worth Tk 82,778 crore 25 lakhs from the private sector power producers. At the same time, it is producing electricity worth 13 thousand 306 crore 62 lakh rupees from its own power generating station. The annual report also shows that the average cost per unit of generation from BPDB’s own plants is 7.63 paise, from independent power producers (IPPs) at 14.62 paise, from rental centers at 12.53 paise, from public plants at 6.85 paise and India From 8 taka 77 paise electricity has been imported. The government buys electricity from the private sector and from India in dollars. According to official sources, the cumulative outstanding bill of the government now stands at about 5 billion US dollars, of which about 4 billion (about Tk 43,93 crore) is in the power sector and the remaining 1 billion in the hydropower sector. Minister of State for Electricity, Water and Mineral Resources Nasrul Hamid also acknowledged the severity of the crisis. He recently said that the real crisis is not the local currency. Somehow we can manage it. But the main crisis is the dollar. We are not getting dollars from Bangladesh Bank as per our requirement. He pointed out that at least $1 billion a month is needed to meet payment obligations in the power and water sector. In such a situation, the government has recently launched several bonds through Bangladesh Bank to facilitate payment of some dues to BPDB. A BPDB official said on condition of anonymity, “Initially we have issued a bond of Tk 5,000 crore and it may go up to Tk 12,000 crore.” He added that this would not be enough to cover the losses, even though the government has been providing subsidies regularly. He also said, ‘For this, the government has to increase the price of electricity or launch more bonds. If more bonds are issued, it may constrict the flow of credit from the banking sector to the private sector.’ But a final decision on what they will do is still pending.