RENTAL power plants, set up as an emergency measure under an indemnity law to resolve power shortage soon after the Awami League had assumed office in 2009 that ended in a permanent arrangement to drain the state exchequer by channelling public money into private pockets through capacity charge payment, have not only been a great burden to the economy. The owners of the plants, mostly the ones that run on furnace oil, have also spread their tentacles to use policy loopholes to earn even more. The furnace oil used in power generation is privately imported by the owners of the oil-run plants, which account for 5.88GW out of the installed generation capacity of 27.79GW. In the 2022–23 financial year, the government needed to spend Tk 380 billion on the import of furnace oil amidst an economic crisis at a time when the government had to take out $4.7 billion in loans from the International Monetary Fund. The failure of the government to implement an international standard to establish the cost of energy transport, as a Power Development Board analysis shows, forced it to spend 20 per cent additional money that helped private power producers to make wicked profits. The proposition is abysmal.

The board analysis shows that a power producer, which owns three fuel oil-based plants with a combined capacity of 256MW, imported more than 15,000 tonnes of furnace oil submitting that it spent more than $43 a tonne in freight charges. But the producer used a mid-range tanker that could carry double the volume from Singapore. They do this as they are entitled to a 9 per cent service charge on their expenses. The producer could have coordinated the oil import of the three plants to fully use the freight capacity to lower expenses. The power board officials say that some oil-based power producers even charged $60 on the import of a tonne of oil. The analysis also shows that coal-fired plants, which follow the global freight standard, imported a tonne of coal for a charge of $13–$14 from Indonesia in mid-range tankers whilst, as power development officials say, the import of oil should be lower than the import of coal, which is more difficult to handle. The analysis shows that power producers involved offshore companies, which are also concerns of the power producers, in some cases, in keeping with the contracts, inflating the import cost by 7 per cent. Power producers directly importing oil can have 25 per cent of customs duty and value-added tax whilst import through third parties means a 7 per cent in the cost in additional 5 per cent in advance tax and 2 per cent in advance income tax. There could be cases where power producers may not, in fact, have the money to use the full capacity of tankers for oil import. But the producers need to be forced to form, rather, a consortium of a sort, to optimally manage the oil import. The government should also evaluate the energy import already made and hold officials responsible for company affairs and private power plant operations to account. News Link: Govt should mend loopholes in energy import for rental power