Irregularities and corruption in the country’s power and energy sector resulted in an average of $1 billion in annual gas theft over the years 2020, 2021 and 2022, with these losses showing up as “system loss.”
This amount represents 9.82 per cent of the total gas, including captive power and unaccounted-for gas, which combines system loss, pilferage, and system gain.
Energy experts have urged a series of reforms, including reducing the import of Liquefied Natural Gas (LNG), boosting domestic fertiliser production, continuing gas exploration within the country, and embracing alternative fuels.
They also called for the immediate shutdown of quick rental power plants, the closure of new LNG terminals, the removal of fuel subsidies, strict monitoring of gas pilferage and subsidise renewable energy.
The recommendations were made during a seminar, titled "Challenges of Reform in the Energy & Power Sector," organised by the International Business Forum Bangladesh (IBFB) in Dhaka's Tejgaon area on Wednesday.
The seminar was chaired by IBFB President Humayun Rashid and moderated by Energy & Power, a magazine, Editor Mollah Amzad Hossain. Professor Ijaz Hossain, Dean of Engineering with a specialisation in Energy and Environment at the Department of Chemical Engineering of Bangladesh University of Engineering and Technology (BUET), presented the keynote paper.
Gas price scenario
Energy experts pointed out the consequences of halting domestic gas exploration while increasing dependence on imported LNG. They pointed out that despite a halt in domestic exploration, the country continues to claim gas consumption for domestic purposes, leading to significant gas price hikes. In 2024, the price of gas has already surged to Tk 19 per cubic metre, with 80 per cent sourced domestically and 20 per cent from imports.
According to IBFB, the situation is set to worsen. By 2030, the gas price could escalate to Tk 38 per cubic metre, with an even split between domestic production and LNG imports. Projections indicate that the price may skyrocket to Tk 55 per cubic metre in the near future, where only 20 per cent of the gas will be domestically sourced, and a staggering 80 per cent will rely on LNG imports.
During his keynote paper presentation, Ijaz Hossain stated, “The irregularities and corruption in the power and energy sector is the same as the banking sector. In the name of 100 per cent electricity, the ousted government made the path of thievery easier.
“The gas sector system loss, also known as un-accounted for gas (UFG) was 9.82 per cent of the total, worth $1 billion between 2020 and 2022. Suppose, we consider system loss as a defected pipeline and everything, more or less five per cent which is the same as our factories lack for production,” he said.
He warned that if immediate action is not taken then the crisis will be prolonged and hamper the economy.
Businesses for dropping gas price
Bangladesh Textile Mills Association (BTMA) President Showkat Aziz Russell said that the energy crisis has become complex, massive and horrible simultaneously. He also demands to reduce the gas prices and not to increase it further.
“The former government has done massive corruption. There is no mechanism in terms of pricing. The gas price increased 260 per cent within the last ten years which is now Tk 31.50. As an exporter we want gas at an affordable price.”
Politicisation of numbers
Mohammad Tamim, professor of the Department of Petroleum and Mineral Resources Engineering at BUET, said, “The former prime minister played the politicisation game of numbers in the name of development. Same was done for GDP and similar things happen in the power sector.
“The generation, transmission and distribution were decided without maintaining any standard. Everything was decided politically though it is supposed to be decided technically. It was information terrorism, political favouritism, and corruption that led us to this end,” Tamim, also the guest of honour, added.
“We are moving on figure-based politics. For example, the Awami League set a target of 24,000-megawatt electricity production as a political target. I am using 13,000 megawatts. There has been data terrorism in every area. Surprisingly, the country mentioned a GDP target of nine per cent growth for the next 20 years which is baseless in the current context,” he said.
Addressing the session, he said that there is a misconception about capacity payments, “we need to find out how much of the Tk 1 trillion payment is being used.”
Tamim further mentioned that gas was not explored locally in the development of the country's energy sector due to personal profiteering.
Tamim, also a member of the white paper committee, said, “We should focus more on gas exploration, drilling the existing wells and finding new wells as well. We do not want to make another mistake as the economic situation is standing at the bottom of the bottom.”
BTMA Director Razeeb Haider; Md Nurul Aktar, president of Bangladesh Solar & Renewable Energy Association (BSREA); MS Siddiqui, legal economist and vice president of IBFB, were also present at the seminar.
