Kafco clears Tk 950 crore dues to gas distributor

Karnaphuli Fertilizer Company Limited (Kafco) has paid its dues of around Tk 950 crore to the gas distributor, which had been mounting since August 2023 when the previous contract expired.

The Karnaphuli Gas Distribution Company Limited (KGDCL) yesterday signed a fresh gas sales agreement with Kafco to supply around 55 million cubic feet of gas per day (mmcfd).

During the contract signing programme at Petrobangla, Industries Secretary Md Obaidur Rahman handed over two cheques worth Tk 958.18 crore to KGDCL on behalf of Kafco—a 100 percent export-oriented multinational company.

Under the previous agreement, KGDCL had been supplying gas to Kafco at a fixed rate based on local gas prices.

However, the government had been purchasing fertiliser at the imported rate, and the previous contract was not extended.

Despite this, Kafco continued receiving gas from KGDCL and had been issuing bills at a higher rate—Tk 30 per cubic metre—which led to disputes over billing.

The rate under the new agreement has not been disclosed.

A press release from the Ministry of Power, Energy and Mineral Resources stated that, under the new agreement, Kafco will receive an uninterrupted natural gas supply from KGDCL, contributing directly to the enhancement of agricultural and industrial production in the country.

Energy and Mineral Resources Division Secretary Mohammad Saiful Islam, Petrobangla Chairman Md Rezanur Rahman and Bangladesh Chemical Industries Corporation Chairman Md Fazlur Rahman attended the programme, among others.