IMF prod for power-energy subsidy withdrawal

Consumer-rights campaigners worry about further inflation spikes as the visiting IMF appraisal mission asks government authorities to make sure subsidies do not exist in the pricing of power and energy. Official sources said the International Monetary Fund (IMF) team made the call in separate meetings with officials of the Power Division, Energy Division, and Petrobangla in the capital, Dhaka, on Thursday. The Fund team has been on the visit to Bangladesh since last week to review progress the country made so far in conducting reforms and meeting targets after obtaining a $4.7 -billion loan from the Washington-headquartered lender last year. The multilateral lender is scheduled to release a third tranche of the loan based on the review outcomes. At a press meet of CAB later in the day, consumer-rights campaigners vented worry about inflation worsening over fuel-price hike through subsidy withdrawal. They were also critical of sidetracking public hearings at BERC on energy pricing. The IMF delegation, on the other hand, praised the government during the meetings for the introduction of automated pricing of fuel oils, officials said. At the same time, the visiting team emphasised phasing out subsidies from energy and power sector as early as possible. Officials said the IMF team also expressed concern over the idle power plants and payment of capacity charge to them which has been causing "bleeding to the economy". Sources said power-division officials informed the IMF team that they would phase out subsidy over next three to four years. "At this point, the IMF team expressed concern over the subsidy in power sector and especially on capacity charge," said one of the sources. Moreover, they also vented concern as the Bangladesh Power Development Board turned into a losing concern. Sources said at the meeting with the Petrobangla officials, the IMF team inquired about the import situation of liquefied natural gas and non-payment of dues of the international oil and gas companies (IOCs). The Petrobangla officials in this case blamed dollar shortage for the payment failure. The government opted for the IMF loan in the wake of strains on the country's foreign-exchange reserves. Also, the Petrobangla officials through a power-point presentation elaborated on plans for gas exploration until 2041, LNG import, supply and sale and revenue issues. [email protected]
Published on: 2024-05-02 20:56:50.257841 +0200 CEST