Petrobangla reels from 10,000C unpaid bills

The corporation informed the Energy and Mineral Resources Division (EMRD) at the end of December.

The cumulative outstanding bills that several electricity generation and fertilizer companies owe Bangladesh Oil, Gas, and Mineral Corporation, well-known as Petrobangla, amounted to Tk10,000 crore last year.

The corporation informed the Energy and Mineral Resources Division (EMRD) at the end of December, say officials.

Of the amount, Tk8,000 crore remains unpaid by power plants, while the rest of the amount has been held back by fertilizer companies.

Petrobangla has to import over five million tons of petroleum products, mainly liquified natural gas (LNG), from Qatar Gas, Oman Trading, and the Spot Market, at a cost of $4.5 billion.

It also has to pay Chevron to buy gas from its three gas fields, where unpaid bills now stand at $300 million due to a backlog in payments. The corporation also imports gas from some other foreign companies, like the US giant, to meet local demands.

In October, the Bangladesh Power Development Company (BPDB) cleared some gas bills with Petrobanga. The BPDB at the time assured the corporation of paying the rest of the amount gradually.

However, the state-run leading power company failed to keep its pledge.

Other than the BPDB, several independent power producers (IPPs), too, owe bills, said an official of the EMRD.

“Some gas transmission companies also supply gas to power plants. Since the gas companies, too, are not getting bills from the power plants, they are also failing to pay us,” he said.

“But we have to import gas, and this should be under their consideration,” he added.

The work report of the EMRD for the month of December mentions that the division’s joint secretary (operations) informed a meeting that the BPDB owes almost Tk8,000 crore.

“Of the total outstanding bills, the BPDB paid only Tk283 crore in December, while two IPPs paid Tk41 crore,” he said, revealing the outstanding pay (Tk2,000) by the fertilizer companies.

At the meeting, he continued, the representatives of the fertilizer companies stated that they would pay the bills through the Agriculture Ministry after the Finance Division had approved the required allocation.

At least 60% of the gas supplied by Petrobangla is used for generating electricity.

Before the report was prepared, the BPDB was already struggling to pay outstanding bills due to a financial crisis.

Meanwhile, the urea factories receive 100% of the gas they need for production from the national grid.

Since Petrobangla imports LNG to meet the growing demand, the payment crisis is intensifying every day.

The state-run gas corporation is grappling with paying the import bills as it sells gas at a “lower price” through a subsidy from the government exchequer while facing mounting unpaid bills.

In October, the BPDB alone paid Tk871 crore and promised another Tk1,200 crore. But it paid only Tk283 of the pledged amount in December.

In addition to the BPDB and the two IPPs, more private businesses and other government power plants also use Petrobangla's gas supply. They, too, owe a huge sum of bills, sources said.

In a letter signed on January 4, Energy Secretary Md Nurul Alam instructed two joint secretaries of the Power, Energy, and Mineral Resources Ministry to keep in touch with the power and fertilizer companies in question to help realize the unpaid bills.

The country's power sector, too, has been hit by a severe cash crunch, especially the US dollar, piling up a huge backlog in payment of their import bills, according to official sources in late December.

According to sources, the power and energy sectors' cumulative outstanding bills as of December jumped to about $5 billion.

The backlog amount in the power sector is about $4 billion (about Tk43,093 crore), and the remaining $1 billion is in the energy sector, officials said then.

At the time, State Minister for Power, Energy, and Mineral Resources Nasrul Hamid also acknowledged the severity of the crisis.

“The crisis is not of local currency. Somehow, we can manage it. But the main crisis is the dollar. We’re not getting dollars from Bangladesh Bank as per our needs,” he told UNB.

He noted that the power and energy sectors need at least $1 billion a month to meet payment obligations.

"But we’re just getting less than half of that,” he said, adding: “As a result, cumulative outstanding amounts are rising every month.”