DHAKA: Bangladesh will spend $6.17 billion on importing oil in the 2011-12 fiscal year, more than double the previous year, as it buys more fuel at higher cost to fire up new power plants aimed at easing electricity shortages, a senior energy official said.
"This year (July-June) the state-run Bangladesh Petroleum Corporation (BPC) will import 7.03 million tonnes of fuel oil, up from 5.4 million in 2010-11," BPC chairman Mohammad Muqtadir Ali told Reuters on Sunday.
" The cost of the import at current prices is estimated at $6.17 billion, against $3 billion last year," he said.
The government has allocated 224.7 billion taka ($3 billion) as a subsidy in various sectors including agriculture and for fuel in the 2011-12 budget, compared with 194 billion taka the previous year, said an official of the finance ministry.
"The import cost and subsidy are going up because of price rises in the international oil market, and for additional imports to run oil-fired power plants."
BPC is the sole oil importer and distributor in the country.
Muqtadir said the fuel import would increase mainly due to the setting up of about 30 oil-operated power plants.
In the last two and a half years, the oil price has nearly tripled in international markets. In December 2008, oil was trading at $34 a barrel. It is now hovering around $97.
The subsidy in the energy and power sectors increased about 280 percent last year, a document of the finance ministry showed.
Copyright Reuters, 2011