Home ›› 01 Sep 2022 ›› Editorial
The ongoing conflict in Ukraine and its spill-over effects have resulted in an abrupt hike in the price of fuel, prompting the government to introduce energy-saving measures to brace for tough times ahead. The current social situation with austerity embraced at all levels has compelled the media to delve deeper into the actual energy import cost of this country.
As per a report published in The Business Post on Wednesday, Bangladesh’s import of energy is putting pressure on her forex reserves. Reportedly, the government every year spends around $14 billion on importing fuel, gas, coal and electricity - the four major utilities.
It’s believed that by 2030, this expenditure will exceed around $25 billion when 80 per cent of the country’s primary energy will be imported.
Experts have cautioned that the massive energy import will create pressure on the economy unless the export income is increased.
Petrobangla’s documents show importing 850mmcfd LNG will cost Tk44, 000 (4.4b counting Tk100 against a dollar) crore annually but due to lack of money, it is not possible to import this amount of gas.
In this case, Bangladesh’s best bet would be to get into negotiations with top LNG-producing nations to get a special rate for LNG gas. Also, bringing more Floating Storage Regasification Units, FSRU, maybe a solution. By 2030, the gas and LNG supply ratio will stand at 50:50 and the selling price at Tk28.
Understandably, if the demand increases, the domestic supply and LNG ratio will be 20:80 and the price will be Tk40, which may be steep demand on the users.
On the other hand, Bangladesh consumes 6.5 million tonnes of fuel oil annually of which 97 per cent are imported. According to the Bangladesh Petroleum Corporation (BPC), it imported fuel oil for $4.4 billion in FY-22.
But due to the recent price rise of fuel, the cost of fuel import will surge to over $6 billion in FY-23.
Without a doubt, the recent price hike of fuels plus the ongoing energy shortage have blindsided the nation. However, there’s a silver lining to all impediments and the current situation will compel us to set up/boost alternative pro-environment power capacity. The issue of harnessing the power of the sun has been in discussion but what is needed is a nationwide solar revolution with solar panels installed extensively in rural areas.
Bangladesh is currently passing through a very sunny and dry season, which can be turned into a boon if the government takes a countrywide solar panel advocacy campaign. These can either be handed out at low cost or sold with the instalment payment facility.
In the government is overwhelmed, support can be asked for from development partners. On the other side, looking at wind power and transforming it into energy is another option. The harsh reality is that energy demand will rise and therefore, to minimise the cost the country needs to seriously explore other greener options.
According to BPDB estimates, it takes 3 million tonnes of coal to generate 1,000MW of electricity annually — which means the country will need 27 million tonnes of coal if seven plants are to add over 9,000MW to the National Power Grid from 2025.
Several energy experts have contended that Bangladesh needs to open the vast coastal areas to exploration.
Reportedly, state-owned Petrobangla has shortlisted four international consultancies and is in the process of hiring a consultant to make its model production sharing contract (PSC) more attractive to foreign investors interested in offshore gas exploration.
Professor Badrul Imam, a noted geologist has said repeatedly that Bangladesh has to put an end to its extremely slow pace of exploration as well as the bureaucratic overlordship on the national exploration activities.
