Kazi Zahidul Hasan :
The government’s expenditure on subsidies is likely to rise significantly in the next fiscal year, due to rise in petroleum subsidy in view of soaring global oil prices and LNG import.
The Ministry of Finance has proposed an allocation of Tk 42,100 crore on account of subsidy in the next fiscal’s budget (2019-20) considering the additional needs of subsidy.
The current fiscal’s budget got an allocation of Tk 31,700 crore for meeting the government’s subsidy expenditure.
According to an estimation, expenditure on account of power and energy subsidy would reach Tk 9,500 crore, food subsidy Tk 9,500 crore, agriculture subsidy Tk 9,000 crore and export subsidy Tk 4000 crore in the upcoming budget.
Besides, an allocation of Tk 9,600 crore has been proposed to various sub-sectors and Tk 5,000 crore as loans and grants to public entities like Bangladesh Petroleum Corporation (BPC) and Bangladesh Power Development Board (BPDB).
“The recent upward spiral in international crude oil prices pushed up Bangladesh’s oil import bills renewing pressure for petroleum subsidy,” a high official of the Energy Ministry told The New Nation yesterday asking not to be named. He said, BPC is now incurring Tk 12 to 15 crore as losses per day from oil trade in domestic market. If the domestic oil prices are not revised, it will widen BPC’s losses further.
The BPC already sought Tk 8,500 crore as subsidy from the Finance Ministry to foot oil import bills for the current fiscal year.
He also cited that rising import of LNG also created additional demand for subsidy.
“Petrobangla has recently received Tk 1,000 crore as subsidy to foot the LNG import bills. But the demand for subsidy will rise further in the next fiscal year in view of additional import of LNG,” said the Energy Ministry official.
“The government would make higher allocation on the account of subsidy considering needs of various sectors,” a senior finance ministry official told The New Nation on Saturday on condition of anonymity.
He said the proposed subsidy expenditure would be accounted for 1.5 per cent of the GDP, while the total amount of subsidy allocated in the current fiscal’s budget accounts for 1.2 per cent of the GDP.
In the fiscal year 2017-18, the government’s total subsidy bill reached 0.8 per cent of the GDP.
