Prime Minister Sheikh Hasina on Wednesday underlined the need for downsizing subsidies in the power sector and sought full cooperation from the people in this regard.
"I hope that people of the country will cooperate with us," she said stressing that the reduction in government subsidy is needed to face the uncertain situation created by the Russia-Ukraine war and the sanction on Russia imposed by the US and European countries.
The prime minister said this while inaugurating country's first campus-based business incubator "Sheikh Kamal IT Business Incubator", Sheikh Jamal Dormitory and Rosy Jamal Dormitory at Chittagong University of Engineering and Technology (CUET) virtually from her official residence Ganobhaban.
She mentioned that in the power sector the government is providing some Tk28,000 crore in subsidy while the amount is Tk25,000 for LNG import.
She said the government has to resort to load-shedding and cut down on power production to ease the subsidy in this sector.
PM Hasina explained that for every cubic metre of LNG, the government gives Tk59.60 where the consumer level price is Tk9.69 only.
"The price has been increased recently to Tk11. But still there is huge subsidy there," she said.
She mentioned that renewable energy power production cost Tk12.84 per KW, where the government is charging Tk5.08 only.
The cost of power production by furnace oil is Tk17.41, while the selling price is Tk5.08 only. For diesel, the production cost of per unit electricity is Tk36.85 while the selling price is Tk5.08 only.
The production cost of coal-based power is Tk12.37 whereas the selling price is Tk5.08 only.
"How long will we be able to provide such huge amount of subsidy? We have to provide food, medicare and home for the homeless people," she said.
The prime minister said that this year's budget has a government allocation of Tk84,000 crore as subsidy.
"If we do not reduce the subsidy, from where the government will get money," she questioned.
She also urged all to practice austerity in consumption, especially in power along with increasing their respective savings.
"We have only one option, I have already directed to impose area-based load-shedding and prepare a routine for that to inform the people earlier so that they can take preparation and suffer less."
Hasina said that operation of the power plants, which are run by imported fuel oil and coal, has become very much tough as It has become too much costly.
She said that the USA and Europe imposed sanctions on Russia following the Russia-Ukraine war caused the price spiral of fuel oil, fertiliser, food, transportation cost and other items across the globe.
"Bangladesh is also getting the impact of that price hike. The sanction is creating a suffocating situation for the whole world," she observed.
She mentioned that due to the sanctions prices of furnace oil have soared to Tk1,080 from Tk708, an increase by 52%.
LNG price has jumped from $10 per mmBtu (Metric Million British Thermal Unit) to $38 mmBtu, that means a hike by 280%.
The price of coal was $187 before the war and it is now $278, registering a hike by 114%, she said.
The price of diesel, on which the country is very much dependent, was $80, which has risen to $130. It is speculated that this price may shoot up to $300, the premier said.
"That means the whole world is heading towards a devastating situation," she warned.
The PM said that If these sanctions (on Russia) were not imposed, the supply from Russia and Ukraine would have continued.
She mentioned that UN Secretary General formed a group where she has been included. A discussion in that group took place regarding the matter.
"In that group we discussed to allow food and fertiliser to be exported from there (Russia and Ukraine). Some steps have been taken in this regard," she mentioned.
She stated that due to the sanctions and stopping SWIFT in Russia, Bangladesh is not allowed to purchase anything from Russia with US dollar.
"No one is there to answer what will be the financial mechanism for this purchase," she said.
She said that the countries which hold Russian currency in their hands can purchase goods from Russia, but as Bangladesh does not have a reserve of Russian currency it has very limited scope to do that.
"But we are continuing our efforts," she said.
She mentioned that the government is trying to advance the country through continuation of economic activities overcoming the global financial turmoil caused by coronavirus pandemic and Russia-Ukraine war.
Stressing diversification of export items, the PM said that Bangladesh has always been dependent on exporting one item – garments.
"To diversify the export basket we put emphasis on ICT items and are working towards that direction," she said. "As a result many companies are coming to Bangladesh and investing here spurring development significantly"