Increase in import of fuel could change the balance in 2014
Economy: Although the country’s overall trade deficit in 2013 stood at Nu 21.42B, its energy trade balance in the same year recorded a surplus of about Nu 122M.
Export of hydropower, also the country’s top export, earned an income of RS 11.2B, but during the same year, the country has also imported electricity worth Rs 222M during the lean seasons making the total earning to around Rs 11B. After deducting hydropower loans, which works out to Rs 3B approximately, net hydro earning comes to about Rs 8B.
However, the country has imported petroleum products worth Rs 7.882B in 2013, leaving the surplus of only around Rs 122M.
Even with the surplus, local economists say that pressure on the rupee reserve will still not ease because almost all the rupee earned by the hydropower sector was utilised in importing fossil fuel from India.
Bhutanese consumers pay in local currency, but the final settlement between the two governments is made in Rupee.
Figures from the department of trade reveals that 169,315 Kilolitres (KL) of petroleum product – diesel, petrol, kerosene, LPG, lubricants, aviation turbine fuels, bitumen and hi speed, were imported in 2013.
In terms of volume, this was an increase of 1.07 percent compared with 2012, given the fact that vehicle import ban during the year was still in place.
Interestingly, the irony is that major consumers of fossil fuel are the hydropower projects and government projects like construction of roads. This could be the probable reason behind the meagre increase in fuel consumption because number of vehicles more or less stagnated with the ban.
However, import ban was lifted in July, last year and within four months since the ban was lifted about 707 new cars were imported. This figure, which was not a good number for vehicle dealers who are trying to sell more, indicates that about 2,000 vehicles could be imported in a year.
The Statistical Year Book, 2013 reveals that there are 67,519 registered vehicles as of 2012 in the country, of which 39,324 are diesel and 18,182 petrol vehicles, including two wheelers.
Figures from the trade department also reveal that 122,424KL of diesel and 30,195KL of petrol were imported in 2013 costing Nu 5.47B and Nu 1,74B respectively.
This means that on an average, every diesel vehicle consumed 3,100 litres of fuel every year worth Nu 139,150.
Likewise, a rough calculation also reveals that every petrol vehicle consumed 1,660 liters of fuel spending Nu 96,037 on an average, annually.
While some are of the view that energy trade balance could deteriorate with increasing number of vehicles, others opined that commissioning of Dagachhu hydropower project could bring a marginal increase of surplus energy.
Besides, the government has also rolled out its initiative of promoting electric cars to cut down fuel consumption. Government also emphasized on the need to replace the taxi fleet, which consumed high volume of petrol, with electric cars.
However, since its launch in February last year, not many electric vehicles are seen hitting the road while new brands of non-electric cars are growing in numbers.
Nevertheless, the results are yet be seen but one definite datum is that Bhutan would never experience energy deficit once it starts commissioning of at least one mega hydro project.
Electricity trade played a crucial role in narrowing the deficit. The trade statistics, 2013, show that without the consideration of electricity export, the country’s trade deficit remained at Nu 32.4B.
By Tshering Dorji