System Loss: Petrobangla divides losses among distribution companies 

Gas is supplied from the gas field to the distribution company through the transmission line, and subsequently reaches the consumers via the distribution lines of six distribution companies. 

Allegations of stealing gas through illegal connections have been levied against these companies, with the gases often being recorded as wasted under the guise of system loss. The amount of such loss is on the rise, and now some of it is being attributed to issues with the transmission lines.

Energy experts assert that there is no room for gas leakage from the pipeline. However, holes can emerge in the pipeline due to various reasons. According to international standards, the maximum acceptable gas loss in distribution lines is 0.20 to 0.30 per cent. Moreover, there is no possibility of gas wastage from high-pressure transmission lines.

Gas Transmission Company Limited (GTCL) stands as the sole state-owned gas transmission company. The reported system loss for the company, since January of the preceding year, accounts for 3 per cent of their total gas supply. Bangladesh oil, gas, mineral resources corporation, Petrobangla, has been consistently sending letters to GTCL, urging them to settle their gas bills. Despite GTCL's applications for bill withdrawal citing financial constraints, Petrobangla has not acceded to their request.

Consequently, the system losses of GTCL witnessed a threefold increase in the last fiscal, following the 3 per cent gas wastage. The largest among these companies, Titas Gas Transmission and Distribution Company Ltd., experienced system losses exceeding 10 per cent last April. 

However, by June, this figure had decreased to 4.5 per cent. Notably, the company struggled to curb gas theft even after taking action against their contractors, officials, and employees. 

According to Petrobangla, in the last fiscal year (2022-23), 980 million cubic metres of gas were reported as wasted under the label of system losses in the distribution sector. The import cost of LNG per cubic metre from the black market is estimated to be around 80 taka. 

Based on this, the state has incurred a loss of 78.40 billion taka. Additionally, 620 million cubic metres of wastage is attributed to a 3 per cent loss in the transmission line, resulting in another loss of 49.60 billion taka.

Experts suggest that reducing gas wastage could alleviate the pressure on LNG imports amid the ongoing dollar crisis. However, they express concern that the actual gas wastage might exceed the figures presented on paper. Some consumers are paying higher bills for lesser gas use, creating opportunities to underreport wastage.

Unfortunately, consumers bear the impact of this wastage, particularly considering the 80 per cent average increase in gas prices implemented last January.

Kamruzzaman Khan, Director (Operations and Mines) of Petrobangla, informed Prothom Alo that there may be system losses, with pipeline leakage being a significant cause of gas wastage.

Efforts are being made to monitor and prevent theft or wastage. 

Despite cutting off illegal connections during operations, they are sometimes reinstalled, especially in the case of residential connections, making it challenging to maintain control.

On 8 October, Petrobangla issued a letter to GTCL, urging them to settle the dues for system loss. The letter outlined that GTCL would be responsible for bearing both the system and financial losses resulting from the difference between the quantity of gas supplied to the distribution company through the meter at the transmission point.

Even if there is a financial setback to the company, it is stipulated that GTCL must cover the associated costs. Failure to make this payment would hinder Petrobangla’s ability to address shortfalls in various margin sectors, potentially causing fiscal losses and disappointment for the gas sector as a whole.

In response, GTCL, in a letter dated 26 September, conveyed to Petrobangla that in the financial year 2021-22, GTCL incurred a loss of approximately 2.17 billion taka. They projected a potential loss of 7.08 billion taka in the fiscal 2022-23. If required to pay 5.06 billion taka as system loss, the total loss for GTCL would amount to 12.15 billion taka.

Additionally, GTCL pointed out that they must finance the cost of projects and handle instalment payments for previous projects, making it financially unfeasible to cover the system loss. A letter sent on 19 September had already requested exemption from this obligation.

Two out of the six distribution companies, namely Pashchimanchal Gas Company Limited and Sundarban Gas Company Limited, report no gas wastage. In fact, these companies consistently sell more gas than they purchase each year.

In the last financial year, Sundarban Gas Company Limited sold over 7.8 million cubic meters of gas, while Pashchimanchal Gas Company Limited sold an impressive 22.2 million cubic meters more than they bought.

Officials from these companies explain that the calculation of gas supply or waste is based on financial terms, and they point out that providing gas through residential prepaid meters and industrial EVC meters tends to result in wastage.

Contrastingly, Titas, the largest gas distribution company in the country, has been actively undertaking operations to curb theft, irregularities, and illegal gas usage.

Despite disconnecting around 250,000 illegal connections in the last fiscal (compared to 275,000 the previous year) and over 600 illegal connections, including industrial, CNG, and commercial, gas wastage for Titas increased to 725.5 million cubic meters in the last financial year, up from about 320 million cubic meters the year before. Titas is responsible for gas supply to the capital, Dhaka, and its surrounding areas.

M Tamim, Special Assistant to the Chief Advisor of a former Caretaker Government, highlighted that system losses are predominantly increasing due to theft.

He suggested that when gas pressure is high, there may be wastage in illegal residential connections, and with low pressure, theft may be occurring only on legitimate connections.

Tamim expressed that GTCL's pipelines need to shut down the transmission line if the system loss is 3 per cent stating it cannot be accurate. He mentioned Petrobangla's approach of dividing system losses among companies as a measure to prevent overall losses. 

* This report, originally appeared in Prothom Alo print edition in Bangla, has been rewritten in English by Farjana Liakat