Fighting load-shedding: Commerce to allow on-credit coal import for $5m

The Ministry of Commerce has decided to allow individual companies to import coal worth $5m on-credit per annum, in a bid to restore electricity supply to normal, without putting further burden on the country's foreign exchange reserves.

The decision was made at a ministry meeting with stakeholders on Thursday (8 June) following applications from several companies seeking the opportunity to import higher amounts of coal on-credit amid the ongoing dollar crisis.

"Considering the current situation, it has been decided to increase the on-credit coal import limit. To avail of the facility, importers must take prior permission from the ministry," Commerce Ministry Senior Secretary Tapan Kanti Ghosh told The Business Standard after the meeting.

Representatives of the Bangladesh Bank, the National Board of Revenue, the Department of Power and Energy and the Bangladesh Trade and Tariff Commission were present at the event. 

The current policies allow commercial importers to import goods worth up to $0.5 million on-credit. The limit is being raised to $50 million for coal imports so that coal-fired power plants can have higher amounts of fuel.

The country has several coal-based power plants. Of them, the 1,320MW Payra Thermal Power Station has recently shut off due to fuel crisis, causing a fall in supply of electricity to the national grid and extensive load shedding across the country. The power plant has been importing coal on credit for a long time and its due bills now stand at $36 million. 

Apart from this, Rampal Coal-based Power Plant is failing to utilise its full capacity due to coal shortage. These power plants require thousands of tonnes of coal every day.

Bangladesh Coal Importers Association President Syed Atiqul Hasan told TBS that the commerce ministry decision will make coal import easier and ensure a higher supply to power plants.

A senior official at a power plant, however, argued that the latest decision of the Ministry of Commerce cannot benefit power plants much because one can import as much as 55,000-60,000 tonnes of coal with the $50m credit limit. "With the amount of coal, power plants like Payra can run up to 10 days only," he said, seeking anonymity.