Photo : Messenger
The Ministry of Finance is facing mounting pressure to settle outstanding bills related to the import of fuel oil, Liquefied Natural Gas (LNG), and coal for mega power plants.
International oil and gas companies are consistently pressuring the ministry to clear the pending invoices. Unfortunately, the ministry has been unable to secure an adequate amount of dollars, as the reserve is not increasing rapidly.
According to Petrobangla, the current outstanding bill stands at $670 million for the Bangladesh Petroleum Corporation (BPC). Ras Laffan Liquefied Natural Gas Company Limited has invoiced $36.55 million for LNG imported in October. Additionally, Vitol Asia Pacific Pte Ltd has issued an invoice for LNG imports totaling $49.88 million, scheduled for payment by October 25, 2023. However, the Finance Ministry could not meet the payment deadline due to a dollar crisis.
Chevron has also submitted an invoice amounting to $4.51 million for the month of October.
State Minister for Power Energy and Mineral Resources, Nasrul Hamid, told the Daily Messenger, “For faster industrialisation, we need electricity, but we lack an adequate amount of fuel, so we are compelled to import LNG and other fuels. We are diligently settling the bills to ensure a smooth supply.”
Responding to a query, he said, “The entire world is currently facing economic pressure, which has also impacted us. In this crisis situation, we have to be patient. I hope the economy of Bangladesh will recover soon.”
Chairman of Petrobangla, Zanendra Nath Sarker, told the Daily Messenger, “Despite having funds in the bank, the import bill could not be paid due to the non-availability of dollars. The bill payment deadline has passed, and demand letters have been sent from the two institutions at the beginning of this month. In these letters, the two companies have set a deadline for payment.”
The concerned official also mentioned that in case of failure to pay the bill on time, 4 to 5 percent interest must be added to Libor (London Inter Bank Upper Rate). Furthermore, as per the contract, a late payment penalty will be charged as long as the bill remains unpaid.
Commenting on the situation, prominent energy expert Professor Shamsul Alam told the Daily Messenger, “Aiming to showcase success, the government has made several desperate decisions that are destabilising the sector and the overall economy. Massive LNG imports are one of them. The government should have a balanced master plan, including the exploration of local energy onshore and offshore.”
Criticising the current master plan, he added, “The existing master plan overly focuses on fuel imports. As gas is a major fuel for power generation, the government is forced to import LNG on a large scale. Moreover, this market is not stable. Additionally, the government has to resort to expensive spot market imports in emergency times.”
Some companies may abstain from participating in future bids for LNG imports from the spot market if Petrobangla fails to pay the bills within the scheduled timeframe.
Furthermore, the failure to pay the price of LNG on time could result in substantial financial losses, damage to the country's image, and disruptions in uninterrupted energy supply, according to officials of the Energy Division.
Messenger/Disha
