The country's energy regulator has waived a total of 122 per cent tax on locally-produced natural gas at the consumer end to keep the blended gas price rational with imported re-gasified LNG.
The tax includes 93.25 per cent supplementary duty (SD) and 15 per cent value added tax (VAT) thereafter, a senior Petrobangla official said.
National Board of Revenue (NBR), however, slapped 15 per cent VAT on the import of LNG (liquefied natural gas).
The actions came with issuance of three separate statutory regulatory orders (SROs), dated October 3, 2018, with retrospective effect from September 18.
NBR waived 5.0 per cent customs duty (CD) on LNG import last week, but slapped 2.0 per cent advance income tax (AIT) in April 2018.
With the issuance of these SROs the 'indecisive stage' of the energy regulator in this regard came to an end. It also paves the way for announcing a fresh hike in gas tariff, said a senior official of Bangladesh Energy Regulatory Commission (BERC).
He also said it is almost eminent that the declaration of a fresh gas price will come next week.
"We got all the SROs regarding SD and VAT waiver on locally-produced gas as well as slapping of VAT and AIT on LNG import," Petrobangla director (finance) Md Towhid Hasanat Khan told the FE on Thursday.
Issuing of all these SROs means the existing total tax of 122 per cent, including SD and VAT, on locally-produced gas will be replaced by 15 per cent VAT and 2.0 per cent AIT on LNG import, he further said.
"It will be a sort of relief for us now."
But slapping of VAT and AIT on expensive LNG might raise the blended gas price significantly, he feared.
The price of brent crude - the benchmark for fixing LNG purchase price -climbed up to US$ 84.88 per barrel on October 2, 2018, from $ 66 in April 2018, the official added.
Petrobangla, however, is arguing in favour of the necessity to waive AIT as well against LNG import.
As Petrobangla will not earn any profit out of re-gasified LNG sale to consumers, charging of AIT and re-imbursement of tax from NBR by year-end might be complex, he opined.
Bangladesh has started supplying re-gasified LNG to Chattogram consumers following commencement of commercial supply of the fuel from Excelerate Energy's Moheshkhali FSRU (floating, storage and re-gasification unit) on August 18, around four months after entry of the LNG-loaded vessel.
Excelerate's FSRU vessel - Excellence - carried 136,000 cubic metres of lean LNG from Qatar to Moheshkhali terminal on April 24 to start its commercial delivery from May 07.
But technical issues and rough sea condition during the June-August monsoon in south-west kept it stranded off the south coast of Chattogram for more than three months.
Excelerate docked and connected the FSRU to the subsea pipeline network on August 05, and started injecting gas on August 12.
The existing and new consumers of Chattogram are now receiving around 300 million cubic feet per day (mmcfd) of re-gasified LNG. But Excellence has the capacity to re-gasify around 500 mmcfd.
BERC has planned to fix a new gas tariff considering blending of the imported LNG with locally-produced gas, a senior officials said.
Petrobangla and all its subsidiary gas marketing and distribution companies earlier argued to BERC for hike in domestic natural gas tariff to foot LNG import bills.
Petrobangla demanded fixing the blended gas price at Tk 9.69 per cubic metre after importing around 500 mmcfd of LNG.
BERC held public hearings from June 11 on the gas tariff hike proposals from the state-run gas companies, which sought almost doubling the rate for consumers, except households.
The regulator earlier raised the natural gas tariff by 22.70 per cent for all types of consumers in phases with effect from March 1, 2017 and June 1, 2017 respectively.
