The Bangladesh Power Development Board (BPDB) procures electricity from private sector independent producers (IPPs) operating Furnace Oil Fired (HFO) power plants, with prices ranging from 12.80 taka to 19.89 taka per unit. In April 2023, the highest cost was incurred from the Furnace Oil-fired Feni 114 MW power plant, managed by Feni Lanka Power Limited. Conversely, the Anwara 300 MW power plant offered the lowest price.
The production cost of furnace oil-fired power plants is influenced by energy import costs and BPDB’s electricity purchases. The high taxes on imported furnace oil contribute to higher production costs, making these plants more expensive compared to other fuels. The Bangladesh Independent Power Producers Association (BIPP) has requested a reduction in the tax on HFO fuel to create a level playing field. Currently, BPDB’s power generation list includes 37 HFO-based IPP plants, with a total capacity of 4,377 MW. However, due to the high production cost of fuel oil, BPDB is currently purchasing 2,500 to 3,500 MW.