Govt to Purchase Tk 1,496 Crore LNG from Spot Market

The government has revoked the special benefits granted to United Power Generation and Distribution Company Limited (UPGD), which had been allowed to purchase gas at a lower rate and sell electricity at higher commercial prices, generating significant profits.

Russia has sought Bangladesh's cooperation to ensure the continued operations of Gazprom International in gas exploration, which has been active in the country since 2012. In 2023, Gazprom identified five new wells in Bhola for exploration.

The government has approved separate proposals to procure one cargo of LNG and 72,897 SPC poles to meet energy demands and strengthen Bangladesh’s power distribution system. The approvals were made during the 11th meeting of the Advisers Council Committee on Government Purchase, chaired by Finance Adviser Dr. Salehuddin Ahmed.

The Bangladesh Chamber of Industries (BCI) has criticized the Bangladesh Energy Regulatory Commission’s (BERC) proposal to set gas tariffs based solely on LNG import prices, arguing that it is unconstitutional, unfair, and harmful to industries.

The Advisory Committee on Government Purchases approved two LNG purchases worth Tk 1,496.37 crore from the spot market under the direct procurement method. The Energy and Mineral Resources Division will procure LNG from Total Engineering Gas and Power Ltd, Switzerland (Tk 754.42 crore at $15.73 per MMBTU) and Singapore Pte Ltd, Singapore (Tk 741.95 crore at $15.47 per MMBTU).

Petrobangla is struggling to pay gas supply bills due to a lack of funds, while the National Board of Revenue (NBR) imposes double taxes on the same gas, increasing Petrobangla's arrears. To mitigate financial losses, Petrobangla is requesting the removal of VAT and taxes on LNG imports, which could save Tk 7,775 crore.