Sorry facts behind figures
THE Awami League-led government has managed to bring down subsidy on fuel oil import by an impressive 65 per cent between January 2011 and January 2013, so reveal official records. According to a report published in New Age on Thursday, the Energy Division has projected that the annual subsidy requirement of the Bangladesh Petroleum Corporation is likely to come down further in 2013-14, ranging between Tk 3,500 crore and Tk 4,000 crore, down from Tk 5,368 crore in 2012-13. The apparently positive figures, however, paper over some poignant facts. While the comparatively lower fuel prices on the international market have contributed to the decline, the cut in fuel subsidy has largely come about at the cost increasing misery for people at large. It is worth noting that the government has increased fuel oil prices five times since May 2011; the price of diesel and kerosene currently stands at Tk 68, up from Tk 44, and of petrol and octane at Tk 96 and Tk 99, up from Tk 74 and Tk 76 respectively. One Energy Division official was quoted in the report as saying that the corporation was now making profits from sales of petrol and octane by up to Tk 8 per litre but ‘incurring losses from sales of diesel and kerosene by 8.50 per litre.’ One cannot, thus, rule out the possibility that the government may put in effect another upward revision in the prices of fuel oil, especially given the fact that the International Monetary Fund has tagged fuel price adjustment as a condition to its $1 billion credit.
It is worth noting that, in the first place, the AL-led government created a situation, through its imprudent policies and inept handling of the economy, whereby it desperately needed the IMF loan to maintain the balance of payment. A glaring example of its imprudent policies is the commissioning of short-term rental plants, fuelled by diesel and furnace oil, which resulted in the skyrocketing of subsidy for the energy sector. Late last year, a New Age report quoted Power Development Board officials as saying that, while the rental plants fed only 10 per cent of the electricity supplied to the national grid, they ate up more than 80 per cent of the subsidy. Yet, the incumbents have persisted with the rental plants, introduction of which was allegedly intended to line the pockets of a few individuals loyal to the ruling party. Moreover, the Power Division has recently asked the power board not to penalise these plants for extra fuel consumption. Given the fact that these plants realised Tk 127 crore in penalty till mid-April 2012 from 11 out of 20 liquid fuel-run plants, it is obvious that people at large will ultimately bear the cost.
Suffice to say, in the matter of fuel subsidy, the incumbents have time and again made people at large to pay for their policy blunders, again and again. It is time that they should at least try to right some of the wrongs they have committed thus far, and not vainly claim the decline in the fuel import subsidy and subsequent reduction in the petroleum corporation’s losses as a policy success.
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