Bucking the trend of the last few fiscal years, finance minister AMA Muhith on Thursday announced a reduced budgetary allocation for the power and energy sector for fiscal year 2016-17.
He has proposed to bring down the allocation for power division for next fiscal year by around Tk3,500 crore from the original allocation of current fiscal year mainly due to zero development in its 25 projects.
The government had allocated Tk 16,503 for power Division for current fiscal year, which is around Tk 13,062 in upcoming fiscal year 2016-17.
Incidentally, the government had downsized the allocation for energy and mineral resources division in revised budget at Tk1,120 crore from the original allocation of Tk2,037 crore of current fiscal year.
But in the proposed budget, it has allocated Tk1,973 crore for the division which is around Tk 853 crore more from the revised allocation of last fiscal.
The government meanwhile has not allocated any subsidy for state owned Bangladesh Petroleum Corporation (BPC) for the first time in last 12 years mainly because of falling price of fuel oil in the international market.
In the outgoing fiscal, about Tk800cr was allocated in the budget as subsidy for the BPC but the petroleum corporation did not have to spend that entire amount because of the reduced price of oil on the international market, and the BPC earned a profit this fiscal year.
For fiscal year 2016-17, the subsidy allocation for Bangladesh Power Development Board (PDB) was proposed at Tk6,000 crore.
It was Tk8,000 crore in the outgoing fiscal. The falling oil has an effect on the reduction of power division’s budget as well as a number of power plants use oil as energy source.