As the Bangladesh Power Development Board (BPDB) struggles to pay electricity bills to private producers, volatile fuel costs have begun to affect the country’s power generation sector.
The state-owned sole buyer of electricity, which has a four-month payment backlog due to an increase in the purchase cost from oil-based private power plants, now seeks either another raise in bulk electricity pricing or regular budgetary support to smooth up the power purchase and supply process.
Every month, the BPDB spends roughly Tk3,500 crore on procuring power from commercial providers. However, to fulfill the growing power demand caused by warmer weather, the share of oil-based electricity has increased.
As a result of the gas supply deficit in the pipeline, reliance on oil-based energy has increased, and oil-based generation always has an impact on power purchase costs.
Meanwhile, a spike in diesel prices from Tk65 to Tk80 per liter in November raised the cost of oil-based power generation even more. The BPDB is required by the power purchase agreement to pay electricity bills to private power station owners within 30 days of the bill’s issuance date.
According to certain power plant owners, the power producers are having difficulty bearing operational costs and repaying bank loans obtained against the power plants due to four months’ payment dues, and are pressing the BPDB to clear the dues soon.
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