Govt disburses Tk 40b in LNG subsidies in July-March

Originally posted in The Financial Express on 04 April 2022

The government disbursed subsidies amounting to Tk 40 billion to procure LNG (liquefied natural gas) in the first nine months of the ongoing fiscal year until March 2022.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid disclosed this in the Jatiya Sangsad (JS) on Sunday, while replying to a written question from lawmaker M Abdul Latif (Ctg-11).

The minister said this year had seen an increase in the volume of LNG subsidies compared to previous years, as the government was importing it from the spot market where the rate usually remains higher.

He said the LNG price was linked to the international price of oil, which shot up to US$ 120 each barrel in March 2022. It was $ 22.51 a barrel in March 2020.

Currently, LNG price in the spot market is $36.7 a million British thermal units.

On the other hand, the government is also procuring the same worth $11.50 each million British thermal units under a long term agreement.

The minister said the Ukraine war had made the international oil and LNG market volatile, increasing the prices of fuel further.

The Gas Future in Europe has gone up 4.5 times in March over the same period a year earlier.

However, the finance division has disbursed the subsidies in four equal instalments – October 2021, December 2021, January 2022 and March 2022.