Reducing fuel price by Tk 5 has no impact: Tawfiq-e-Elahi

Prime Minister's Energy Adviser Tawfiq-e-Elahi Chowdhury today (August 31, 2022) said it would have been better to continue with the existing price of fuel instead of reducing it by Tk 5.

"There is no impact of increasing or reducing fuel price by Tk 5. Rather, it should have been left unchanged as we don't know what the situation ahead will be," he said at a press conference in the Prime Minister's Office today.

The press conference was called to share the experience of his visit to the United States and meeting with the Under Secretary of State Jose W Fernandez.

Replying to a query, he said, "No one knows whether the price of fuel will increase or decrease."

He said: "There is no need to increase the price of fuel if NBR reduces the tax. But if you do not pay taxes, you will also have to think about what will be the resources for budget money."

Responding to another query, Tawfiq-e-Elahi said the United States has not imposed sanctions on food, fertilizer and fuel. The government is now considering bringing fuel from Russia and other countries.

"I don't think the US will have any objection if fuel is sourced from Russia or any other source," he added.

It cannot be said that the fuel problem will be solved if the Russian oil arrives as it is yet to be known what the price will be, he added.

The ongoing fuel crisis is a global crisis, mentioning that, Tawfiq said, all the developed countries in the world are maintaining austerity.

"In the UK, the entire family moved into one room to conserve electricity. There may be an 80% increase in energy bills. Germany unveiled a proposal to cut gasoline use," he said.

"I asked for the fuel price everywhere I went and found our price is much less than other countries. Even in Dubai, an oil hub, the diesel price was about Tk 114 per litre.

"We may have steady growth in the power sector if the price of fuel didn't rise worldwide. We may generate between 15,000 and 16,000 MW per day," he also said.

The energy adviser rejected the experts' claim that the country has a significant hydrocarbon potential.. "In 19 out of 21 gas fields which were explored in the country after the Bangabandhu's era, we found only 5 trillion cubic feet of gas which is very poor."

"It should not be said we were not drilling enough as 34 new wells were drilled in the last five years and the production also increased," said Tawfiq.

About the sea exploration, he said, the international oil companies did not express interest in such an unknown area [as the country has no data] instead of doing work in the known and big fields like Qatar and Iran. "However, we are working to amend the production sharing contracts."

When questioned about the criticism of the capacity charges that idle power plants get, the PM's adviser responded, "Such payment is an internationally recognised mechanism. Where would you obtain the electricity during peak hours if you didn't idle some of the power plants? Who will provide the additional electricity if the demand rises to 15,000 MW during peak hours from 10,000MW?"

 "That means you have to keep that 5,000 MW ready for the whole day to get electricity in the peak time and you have to pay capacity charges for the idle time. It exists everywhere in the world," he said.

"It is nothing new. The capacity charge and fuel charge were separated in the first bidding (for a private power plant) which was called in 1996 while I was the secretary (for the energy ministry)," he added.