In a move aimed at easing the burden of inflation on consumers, the interim government has announced plans to reduce power generation costs by 10 percent, rather than increasing electricity tariffs.
“Currently, subsidies in the power sector account for about 1 percent of GDP, which is significantly high. To gradually reduce this burden, a plan has been formulated to cut overall power generation costs by 10 percent,” Finance Adviser Dr Salehuddin Ahmed said during his budget speech on Monday.
If successfully implemented, the plan is expected to save over Tk 11,000 crore in electricity subsidies, he added.
As part of the initiative, the government is reviewing existing power purchase agreements and undertaking energy audits to identify inefficiencies.
The interim government also plans to supply 648 million cubic feet of gas from domestic sources within this year and aims to extract an additional 1,500 million cubic feet of gas by 2028. To achieve these targets, efforts are underway to enhance the capacity of the state-run exploration company BAPEX, with necessary budget allocations already made.
“It is crucial to ensure an adequate supply of energy while keeping it affordable to improve the quality of life and sustain economic activities,” Dr Salehuddin said in his televised, pre-recorded speech.