Government's plan for increasing gas supply for industries

The government has decided to increase gas supply for the industry sector. Dr Fauzul Kabir Khan, Energy adviser of the interim government, informed that the initiative would be taken to increase LNG import (4 additional LNG cargo would be imported during May-August 2025) for additional gas supply in the country. He further informed that natural gas supply would be reduced (from the existing 1,200 mmcfd to 1,050 mmcfd) for power sector and the industries would get more gas. The impact of gas supply shortages for the power plants would be minimised by increased use of liquid fuel-based power plants. Business and Industry leaders of the country have long been demanding unhindered gas and power supply for the industries.

Petrobangla struggles to maintain gas supply as the domestic productions for natural gas has been steadily declining in the country. Currently, Petrobangla has been supplying approximately 2,700 mmcfd (both from domestic productions and from imported LNG). Imported LNG, regasification of the same and transmission of the natural gas processed from LNG remain costly and importing more LNG results in increasing government subsidies. The Energy Adviser informed that the additional 4 cargo LNG import (each LNG cargo holds approximately 3,000 million cubic feet of gas equivalent after regasification) during May-August 2025 period would compel the government to balance Taka 11,000 crore (Tk. 110 billion) shortfall for Petrobangla.

Business leaders have been claiming that the shortages of natural gas supply and abrupt gas price hikes at a regular interval 'erodes Bangladesh's regional competiveness', hurting investment and industrial growth. Energy Regulatory Commission raised 33 per cent gas prices for new industries and captive power plants on 13 April 2025. As per published sources, manufacturing sector consumes approximately 19 per cent and captive power sector consumes 18 per cent gas from the total consumption in industry and power sector in the country. So far, imported LNG share of the country's total gas supply accounts about 30 per cent. The balance supply is ensured from domestic sources (Petrobangla and IOC productions). Bangladesh Investment Development Authority (BIDA) criticised the government's decision (for gas tariff hike) as 'discriminatory' and called for review of the decision.

Ministry of Finance sources inform that the government's revised budget for the current financial year included Taka 190 billion crore subsidies for power, LNG and fertiliser. As reported, subsidies for power sector for the fiscal year stood at Taka 62,000 crore, for LNG Taka 9,000 crore and fertiliser Taka 28,000 crore. Experts consider that the price escalation for energy commodities in the global market and a number of wrong policies introduced in the energy and power sector in Bangladesh are responsible for huge government subsidy requirements for energy and power sectors. Experts feel that policy interventions and consistent monitoring of their execution to reduce the capacity charges paid to the power plants, eliminating inefficiencies and

wastage of resources are important for reducing the subsidy burden.  At the same time, government initiatives are urgent for increasing investment for domestic primary energy development.

Analysts have been observing that efficient use of energy and power has been increasing in industry sectors, specially, in small industrial enterprises. Experts also observe that the published information on GDP growth rate and growth of electricity consumption in the country do  not match. Reports suggest that during the last 15 years electricity generation capacity growth in the country has increased almost 4.75 times. On the contrary, electricity consumption capacity growth remains limited (within the limits of 16-17 thousand megawatts maximum). Published sources further inform that during 2016-2024 period, electricity consumption growth was on average 4 per cent. Sector analysts observe that the industrial electricity consumption rate in the country is not increasing as expected. Industry owners prefer not to rely on grid electricity due to its unreliability. They rely on captive power generation. Published reports indicate that captive power generation capacity installed in the country is approximately 3,000 MW. President of the Bangladesh Chamber of Industries (BCI) Mr. Anwarul Alam Chowdhury considers that the 'growth of electricity use in industry sector is not significant'. He further considers that the true information on the country's GDP growth, energy sector growth should be published for the benefit of all concerned.

It may be recalled, that the previous government prepared the 'Power System Master Plan 2010' and projected that the annual growth of electricity would reach 10 per cent. The document projected that the economic growth would increase significant demand for electricity in the country. Based on the projections, nearly 90 power plants projects had been approved during 2010-2024 period. In reality, a large numbers of the installed power plants have been sitting idle as electricity demand growth projections did not prove correct. As a result, the burden for payments of huge capacity charges for the idling power plants has been increasing.

Mushfiqur Rahman is a mining engineer. He writes on energy and environment issues.

mushfiq41@yahoo.com