Two news items are quoted here. First, Bangladesh Petroleum Corporation (BPC) will import 66,000 metric tonnes (MT) of High Speed Diesel (HSD) equivalent to 30 rakes from India in the period between May to December this year. Second, Bangladesh will import 1.4 million tonnes of crude oil from Saudi Arabia and Abu Dhabi for the current fiscal year (2017-18) to meet the domestic requirement. These are being presented as snippets or part of the huge import of petroleum products by Bangladesh from different sources to generate electricity as well as to supply transport fuel within the economy. Apart from the costs incurred it also has to provide subsidies to keep the oil prices within the reach of the consumers. However, such import-subsidisation strategy not only exerts pressure on the nation's balance of payments but also creates a possible crowding out of public investments in other productive sectors. LPG and LNG could be chosen as substitutes in this case and as such imported LPG/LNG will relieve the government of its burdens arising from oil imports and subsidies paid thereof. Of the two, LNG is cheaper as the average spot price for LNG in Asia hovers around US$ 4.241 per million British thermal units while spot price of crude oil will cost as much as US$ 52 per barrel.
Moreover, LNG has some more distinct advantages. It has high energy content which can drastically bring down energy demand. It has been estimated that combustion of a unit of LNG provides 600 times more energy compared to combustion of a unit of natural gas. Secondly, it is comparatively more environment friendly and according to Shell, it can emerge as a lower-carbon transport fuel all over the world. While fossil fuels aggravate environmental pollution by depleting the ozone layer, use of LNG will significantly reduce emission of harmful greenhouse gases and nitrogen dioxide into the atmosphere. Thirdly, transportation of LNG is easier than other forms of energy.
Acute shortage of natural gas is mainly responsible for power crisis in Bangladesh. Supply of natural gas is highly subsidised. This has led to inefficient use of this energy source as a result of which the country is on the verge of exhausting its natural gas reserve by 2030. Use of LPG as an alternative energy source can solve this problem to a large extent. In addition, LPG accounts for low combustion emissions and does not produce black smoke either which makes it a comparatively better source of energy. LPG is produced as a bi-product of natural gas processing which keeps its costs low and affordable. LPG can help improve standard of living in villages where the rural population is heavily dependent on firewood, mud cakes, rice husks, etc. for cooking and heating which lead to health hazards for women.
On the other hand, the socioeconomic costs of burning fossil fuels across the developing world are enormous and devastating. For instance, it has been estimated that air pollution from combustion of fossil fuels causes around four million premature human deaths per year in the developing countries. Moreover, the use of biomass for energy generation leads to deforestation that enhances the possibilities of natural calamities like floods, especially in a tropical country like Bangladesh. Therefore, shifting from traditional fuels to LNG and LPG would ideally improve the standard of living of the people of Bangladesh and would also help attain the far-reaching social, economic and environmental goals. Results of different studies revealed that transition to use of LPG and LNG is one of the potential ways to ensure energy security in Bangladesh. By promoting LPG and LNG, Bangladesh can gradually resolve its energy crisis and establish energy security. The strategy of enhancing the use of LPG and LNG is very much in line with the United Nation's Sustainable Development Goals (SDGs). Moreover, certain factors affecting the potential use of these energy sources and hampering development of the associated energy markets in Bangladesh need to be identified and appropriate policies have to be taken to rectify them.
© 2017 - All Rights with The Financial Express