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Fueling quick-fire power plants: beg or borrow?

Hasan Azad |
Update: 2010-07-18 00:26:47
Fueling quick-fire power plants: beg or borrow?

DHAKA:  The government is considering an offer for loan instead of handing out subsidy for the supply of fuel oils to the quick rental and rental power plants, hired for a quick-fix answer to a nagging electricity crisis.

The Finance Ministry is learnt to have advised Bangladesh Petroleum Corporation (BPC) to take the total amount meant for subsidy as loan with 3 percent interest.

Recently the BPC has sent a letter through the Energy Division seeking Tk 750 crore in subsidy.

“A subsidy of Tk 750 crore has been sought from the Finance Ministry which suggested borrowing the funds instead,” BPC chairman Anwarul Karim told banglanews24.com.bd.

Karim said he would sit formally with the Finance Secretary soon to discuss the issue.

Requesting anonymity, a high official of the Energy Division told banglanews24.com.bd that the country will require 3.85 lakh tonnes of diesel and 3.12 lakh tonnes of furnace oil to run the quick rental and rental power plants at a cost of Tk 761.37 crore.

The price of diesel on the international market is Tk 49 per litre which will be sold at Tk 44 on the local market, incurring a loss of Tk 5.3 on each litre.

Purchase of furnace oil costs more for the BPC.

Furnace oil on the international market costs Tk 41.75 per litre which will be sold at Tk 26 on the local market, leaving a Tk 15.75 loss on each litre.

BDST 2100 HRS, JULY 18, 2010

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