[🇧🇩] Energy Security of Bangladesh

[Saif]

Coal imported for Matarbari power plant sent back due to heavy soil mix

The coal is sourced from Indonesia by an India-based company

www.tbsnews.net

Coal imported for Matarbari power plant sent back due to heavy soil mix

Matarbari plant in Moheshkhali, Cox's Bazar. File Photo: Nupa Alam/TBS

The Coal Power Generation Company Limited (CPGCL) has rejected a shipment of 63,000 tonnes of coal after detecting a significant presence of soil in the consignment meant for the Matarbari Power Plant in Cox's Bazar.

The cargo has been sent back to the outer anchorage of Chattogram port following the decision.

The Ultra Super Critical Coal-Fired Power Plant at Matarbari, built on 1,600 acres along the Bay of Bengal, has a capacity of 1,200MW. The first unit began commercial production in December 2022, followed by the second unit in August 2023.

According to CPGCL sources, the coal, supplied by an India-based company that won the tender to source the material from Indonesia, was found to be heavily contaminated with soil, rendering it unusable for power generation.

"We declined to receive the shipment and issued an official letter to the supplier on Friday," Nazmul Huq, executive director at Matarbari coal-fired plant project, told The Business Standard.

Chittagong Port Authority (CPA) sources confirmed that the coal-laden vessel was sent back to the outer anchorage following instructions from CPGCL and the shipping company handling the cargo.

The coal was transported aboard the Singapore-flagged MV Orient Orchid, which entered the Matarbari Channel on 17 March. The ship was operated by Meghna Group of Companies.

Ujjal Kanti Barua, deputy general manager (shipping operation) at Meghna Group, declined to comment, stating, "We are in discussions with the CPA, and the port authority is handling the matter."

Meanwhile, port officials said the conveyor belt used to unload the coal frequently broke down due to the excessive soil mixed with the shipment. "During unloading, we found mostly soil rather than coal," said a CPA official, speaking on condition of anonymity.

Captain Abu Sufian, dock master of CPA, confirmed that the vessel was directed to the outer anchorage in compliance with instructions from the shipping company.​

 

[Saif]

One unit at Adani Power Plant resumes production with 45.79 MW

After a 17-hour forced shutdown, one unit of the Adani Power Plant in Jharkhand resumed generation at 7 pm on Saturday. According to both Adani and Power Grid Bangladesh PLC, Unit 1 of the plant has come back into operation with 45.79 MW, against its actual capacity of 800 MW. Officials mentioned

thefinancialexpress.com.bd

One unit at Adani Power Plant resumes production with 45.79 MW
Published :
Apr 12, 2025 23:05
Updated :
Apr 12, 2025 23:05

After a 17-hour forced shutdown, one unit of the Adani Power Plant in Jharkhand resumed generation at 7 pm on Saturday.

According to both Adani and Power Grid Bangladesh PLC, Unit 1 of the plant has come back into operation with 45.79 MW, against its actual capacity of 800 MW.

Officials mentioned that the generation will gradually increase from this unit.

The Adani Power Plant has two units, each with a capacity of 800 MW.

Earlier on Saturday, electricity generation from this unit had come to a halt, and another unit ceased production on April 1.

Following this, Bangladesh experienced increasing load-shedding due to the shutdown of the generation unit caused by technical faults.

Data from Power Grid Bangladesh PLC, which tracks hourly power generation and transmission statistics, reveals that the country faced its highest load-shedding of 428 MW at 3 pm on Saturday, a weekly holiday when electricity demand is typically lower than on working days.

"This has been the highest amount of load-shedding in recent days, when power shortages typically remained between 50 and 150 MW," said a Power Grid official.

Officials at Power Grid Bangladesh PLC and the Bangladesh Power Development Board (BPDB) are concerned that the shutdown of one of the largest sources of power supply may lead to further increases in load-shedding on working days.

"The extent of load-shedding may further increase on Sunday with the start of the working week," a top official at the BPDB told UNB.

HC orders formation of committee to review power deals with Adani Group

It is assumed that, typically, the country's rural areas in the northern districts are preferred for power cuts because several power plants there run on costly fuels like liquid petroleum, diesel, and furnace oil.

"If diesel is used, each unit of electricity costs over Tk 40, and it's Tk 20 if furnace oil is used," said a senior BPDB official.

Energy Adviser Dr. Fouzul Kabir Khan, however, recently assured that there would be no discrimination in load-shedding allocation. "We'll prefer to resort to power cuts first in Dhaka city and then in other areas," he told reporters in Chattogram.

Meanwhile, the BPDB has requested the Oil, Gas, and Mineral Resources Corporation (Petrobangla) to provide additional gas supply to power plants to boost electricity generation from local power stations.

Official data show that the country's demand was forecasted to be 12,600 MW during daytime peak hours and 13,800 MW during evening peak hours.

Bangladesh has been importing electricity from Adani's Jharkhand Power Plant since April 2023 under a 25-year power purchase agreement (PPA).​

 

[Saif]

RENEWABLE ENERGY POLICY: Revision in order

BANGLADESH adopted the Renewable Energy Policy in December 2008 with the ambitious goal of increasing the share of renewable energy in the country’s total electricity generation. At the time, this policy was a significant step forward in aligning the nation with...

www.newagebd.net

RENEWABLE ENERGY POLICY: Revision in order
by Musharraf Tansen 13 April, 2025, 00:00

Bangladesh Sangbad Sangstha

BANGLADESH adopted the Renewable Energy Policy in December 2008 with the ambitious goal of increasing the share of renewable energy in the country’s total electricity generation. At the time, this policy was a significant step forward in aligning the nation with global trends toward sustainable energy. However, fifteen years later, the global energy landscape has shifted dramatically, and Bangladesh’s renewable energy progress has remained stagnant. The targets set in 2008 remain largely unmet, and new technological advancements and climate commitments demand an urgent revision of the policy. As the country grapples with energy security challenges, growing carbon emissions, and international commitments to sustainable development, a revised renewable energy policy must address gaps in the existing framework and introduce innovative strategies to accelerate clean energy adoption. This article outlines the key areas where revisions are necessary to make the policy more effective and aligned with contemporary global best practices.

More realistic targets

THE 2008 policy set a target of achieving 10 per cent of electricity generation from renewable energy sources by 2020. However, as of 2023, renewable energy accounts for only around 3 per cent of Bangladesh’s total electricity generation. The revised policy must set more realistic yet ambitious targets with clear milestones for 2030 and 2050, aligning with international climate commitments under the Paris Agreement. The revised policy should include a clear roadmap to achieving at least 20-25 per cent of total electricity generation from renewables by 2030, a commitment to net-zero carbon emissions in the energy sector by 2050, and sector-wise renewable energy targets, including solar, wind, and biomass.

One of the biggest challenges in implementing the 2008 policy has been the lack of coordination among different government agencies. The Sustainable and Renewable Energy Development Authority, the Power Division, and the Bangladesh Energy Regulatory Commission often work in silos, causing delays in policy execution. To ensure better coordination, the revised policy should establish a dedicated Renewable Energy Council with representation from all relevant stakeholders. SREDA should be empowered with more regulatory and financial authority to drive the implementation of renewable projects, and clear accountability measures should be introduced to monitor the progress of renewable energy initiatives.

Diversification of renewable energy sources

THE 2008 policy primarily focused on solar and biomass energy, with little attention to wind and offshore renewable energy potential. Given the advancements in wind- and hydro-based power generation, the revised policy should promote offshore and onshore wind energy projects, particularly in coastal areas like Cox’s Bazar and the Sundarbans region. It should encourage research and development in ocean energy, hydrogen fuel, and waste-to-energy technologies, and develop a framework for hybrid renewable energy projects that integrate solar, wind, and storage solutions.

Private-sector investment in renewable energy has remained limited due to bureaucratic hurdles, policy uncertainty, and a lack of incentives. The revised policy should simplify the approval process for private sector investments in renewable energy, introduce tax incentives and subsidies for independent power producers developing renewable projects, and strengthen public-private partnerships in the renewable energy sector.

The introduction of the Net Metering Guideline in 2018 was a positive step, but its implementation has been slow due to technical and financial barriers. A revised renewable energy policy should expand the net metering framework to encourage more residential and commercial rooftop solar adoption. It should offer financial incentives to households and businesses that invest in solar power generation and promote decentralised mini-grid solutions in off-grid rural areas to enhance energy access.

Land constraints for solar projects

ONE of the major bottlenecks in solar energy expansion is the scarcity of land. To overcome this issue, the revised policy should encourage floating solar farms on reservoirs and water bodies. It should promote the use of industrial rooftops, railway stations, and other underutilised spaces for solar installations and introduce agrivoltaics projects, where solar panels and agricultural activities coexist.

Financing remains a major barrier to renewable energy expansion. The revised policy should introduce a Green Energy Fund to support renewable projects with low-interest loans. It should establish special renewable energy bonds to attract domestic and international investors and develop a mechanism for carbon trading to encourage businesses to invest in clean energy.

Bangladesh has committed to the Paris Agreement and has updated its Nationally Determined Contributions with a focus on reducing carbon emissions. The revised renewable energy policy should align with Bangladesh’s Long-Term Strategy for Low Carbon Development. It should include carbon pricing mechanisms to disincentivise fossil fuel dependency and establish clear guidelines for phasing out coal and reducing dependence on imported LNG.

Technological innovation, local manufacturing

BANGLADESH relies heavily on imported solar panels, wind turbines, and other renewable technologies. To enhance energy security and create jobs, the revised policy should promote local manufacturing of solar PV panels, batteries, and wind turbines. It should provide research and development incentives for universities and research institutions working on renewable energy technologies and encourage technology transfer partnerships with international renewable energy firms.

Given Bangladesh’s vulnerability to climate change, energy infrastructure must be resilient. The revised policy should ensure that renewable energy projects consider climate adaptation measures. It should integrate energy storage solutions to address the intermittency of solar and wind power and establish disaster-resilient energy infrastructure in cyclone-prone areas.

Learning from regional leaders

India and Vietnam offer valuable lessons for Bangladesh in renewable energy policy implementation. India has successfully promoted performance-linked incentives, feed-in tariffs, and large hydropower projects while also setting up mini-grids and renewable energy management centres. Vietnam, on the other hand, has embraced ambitious renewable energy targets, implementing net metering, green energy certificates, and incentives for domestic renewable manufacturing. Both countries have successfully attracted foreign investment through clear policy guidelines and stable regulatory environments. Bangladesh should adopt similar approaches to enhance its renewable energy sector.

The Renewable Energy Policy of 2008 was a visionary step at the time, but it is now outdated and insufficient to meet the challenges of today’s energy landscape. A revised policy must incorporate lessons from the past 15 years, leverage global technological advancements, and align with Bangladesh’s socio-economic and environmental goals. With a strong and modernised renewable energy policy, Bangladesh can not only reduce its reliance on fossil fuels but also position itself as a regional leader in sustainable energy. The time for policy revision is now — failure to act will only deepen the energy crisis and hinder Bangladesh’s journey toward a greener future.

Musharraf Tansen is a development analyst and former country representative of the Malala Fund.​

 

[Saif]

Gas prices jacked up 33pc for industrial usages

New industries are now to pay Tk 40 and captive power plants Tk 42 per cubic meter of gas as the government jacked up tariffs of the basic fuel by 33 per cent on average, overriding objections. The hike takes "immediate effect from today," it was officially announced as Bangladesh Energy Reg

thefinancialexpress.com.bd

Businesses, rights groups' outcry goes unheard
Gas prices jacked up 33pc for industrial usages
New industries to pay Tk40, captive power plants Tk42 per unit
FE REPORT
Published :
Apr 14, 2025 00:32
Updated :
Apr 14, 2025 00:32

New industries are now to pay Tk 40 and captive power plants Tk 42 per cubic meter of gas as the government jacked up tariffs of the basic fuel by 33 per cent on average, overriding objections.

The hike takes "immediate effect from today," it was officially announced as Bangladesh Energy Regulatory Commission (BERC) Sunday pushed the decision through protests and opposition from businesses and rights groups.

Heretofore, the tariff rate for new industries had been Tk 30 and for captive power plants Tk 31.50 a unit.

The commission chairman, Jalal Ahmed, announced the new tariffs at a press briefing at the BERC auditorium in Dhaka's Karwan Bazar business heartland.

New industries and captive plants, which already attained commitments or demand notes for raising gas loads, must pay 50 per cent, or half the new gas commitments, at current rates.

On the other hand, the remaining half would have to be paid in accordance with the new tariff rates.

Besides, the owners of existing industries and plants must pay tariffs as per new rates for utilising additional gas above their existing approved loads, according to the BERC announcement.

Gas tariffs for all the existing consumers, including power plants, industries, fertiliser factories, CNG filling stations and tea estates are, however, kept unchanged.

The hike in the natural-gas tariffs came after a public hearing against the demand for a rise up to 152.40 per cent or to Tk 75.72 per cubic metre placed by state-run Petrobangla and gas-marketing and-distribution companies.

The Consumers Association of Bangladesh (CAB) had boycotted the public hearing while business leaders and associations opposed the tariff-hike move, but to no avail.

"We have raised the gas tariff at a tolerable level for new industries and captive power plants although the demands from the state-run entities were for raising further by over 150 per cent," said the BERC chairman at the press conference.

Mr Ahmed could not say whether the tariff hike would impact future investment, but said that it would create an opportunity to look for alternative energy sources like liquefied petroleum gas (LPG) and solar power for future industries.

If the tariffs had been hiked as per the demands of state-run gas entities, Petrobangla could earn around Tk 32.40 billion but with the 33-percent hike the corporation would be able to get around Tk 11 billion additionally, he expected.

The BERC chairman could not also say about the amount of subsidy Petrobangla would require due to the new gas tariffs, which are less than their expectations.

But, the BERC chairman expects. the subsidy requirement would decrease.

"Having different gas tariffs for same type of consumers is discriminatory and a violation of the basic rights as mentioned in the constitution," CAB energy adviser Prof M Shamsul Alam told The Financial Express in an instant reaction over the tariff hike.

Petrobangla could save around Tk 35 billion if double taxation against imports of expensive liquefied natural gas (LNG) could be removed, he said.

The tariffs have been hiked by the BERC arbitrarily bypassing the opposition raised during the public hearing, he said.

It went against the spirit of July-August uprising and was a continuation of the 'previous BERC,' which was dominated by the previous government, Professor Alam alleged.

Bangladesh's gas-guzzling export-oriented sectors might face slump in export earnings due to uneven competition after the gas-tariff hike for new industries, President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem said.

"No new industries would be established fearing uneven completion with the existing ones," he feared.

Mr Hatem urges the interim government to take necessary steps for checking gas pilferage.​

 

[Saif]

Gas tariff hike dampener for new investors

Just days after the investment summit was held where investors from home and abroad were welcomed by the interim government with open arms, the country's energy regulator in a paradoxical move reportedly hiked up gas price for new industrial and captive power plant connections by 33 per cent.

thefinancialexpress.com.bd

Gas tariff hike dampener for new investors
FE
Published :
Apr 15, 2025 22:21
Updated :
Apr 15, 2025 22:21

Just days after the investment summit was held where investors from home and abroad were welcomed by the interim government with open arms, the country's energy regulator in a paradoxical move reportedly hiked up gas price for new industrial and captive power plant connections by 33 per cent. However, for older industries with existing (gas) connections, unless they are going to increase their consumption exceeding the allocated load, for instance, moving to further expand their business activities, the older rate of tariff will apply. Similarly, existing consumers including power plants, fertilizer factories, CNG filling stations, tea estates, etc., will pay tariff according to the pre-hike rate . Now, one wonders, how can new investments take place, if fuel (gas) price is increased in such an arbitrary fashion? Unsurprisingly, the new arrangement for gas price has drawn flak from both industries and consumer rights bodies alike since the measure is clearly discriminatory for new industries as well as the existing ones planning to expand their business activities. It may be recalled that around two months before this latest round of gas price increase, Bangladesh Energy Regulatory Commission (BERC) had convened a public hearing on a gas price hike proposal that argued in favour of reducing the deficit of government-owned companies like Petrobangla. As expected, representatives of industries, consumer rights activists and others who attended the hearing were at one in criticising the regulators' proposal as it harks back to the bygone era of autocracy when gas and power prices were increased arbitrarily.

Notably, before this gas price hike by the interim government, the last time it happened was during autocracy in 2023, when the gas price for industries was nearly doubled from Tk16 per unit to Tk30. No doubt, the energy policy of the autocratic government of that time was a flawed one as it was based on LNG import. Now the question is if the incumbent interim government is also following that old policy rejected by the people! Interestingly, the head of the BERC reportedly held the view that the fresh gas tariff hike was tolerable for new industries and captive power units since the state-run gas and energy companies were demanding a 150 per cent increase. It's indeed a strange logic as it defies the general consumers' interest. Protection of that interest is the responsibility of the energy regulator--- a statutory body. The BERC chief's observation that the gas tariff hike would create the opportunity to look for alternative energy sources like Liquefied Petroleum Gas (LPG) and solar power for future industries was, if anything, rather tentative.

But whatever decisions policymakers might make on as serious an issue as pricing of fuels for industries, it has to be carefully considered and planned. There is no scope for experiment here. In truth, the energy regulator needs to devise its fuel pricing policy with an eye to serving the interests of its consumers, especially industries more than that of the state-run companies including Petrobangla. In the final analysis, these state-run companies, too, are to serve the interest of the consumers and not make profit. The interim government needs to think out of the box while devising its energy policy. It must avoid falling in the old trap of imported LNG. On the contrary, it should stress developing the existing and proven reserves of gas as well as explore new wells. There is no short-cut to resolving our energy issue.​

 

[Saif]

Bangladesh eyes to procure 5 spot LNG cargoes in May

Bangladesh is eyeing to import five spot liquefied natural gas (LNG) cargoes in May to meet mounting summer demand. State-run Rupantarita Prakritik Gas Company Ltd (RPGCL) has already bought two spot LNG cargoes and sought to buy three more from spot market for May delivery windows, a senior RPGCL

thefinancialexpress.com.bd

Bangladesh eyes to procure 5 spot LNG cargoes in May
FE ONLINE REPORT
Published :
Apr 15, 2025 19:59
Updated :
Apr 15, 2025 20:17

Bangladesh is eyeing to import five spot liquefied natural gas (LNG) cargoes in May to meet mounting summer demand.

State-run Rupantarita Prakritik Gas Company Ltd (RPGCL) has already bought two spot LNG cargoes and sought to buy three more from spot market for May delivery windows, a senior RPGCL official told The Financial Express Tuesday.

The tender evaluation committee is currently evaluating three tenders for May 15-16, May 22-23 and May 25-26 delivery windows.

The country’s energy demand has gone up from early April with the advent of summer and is expected to grow further with the rise of mercury.

Bangladesh bought four spot LNG cargoes for the delivery windows of the past two months – April and March.

The bid winners will deliver the LNG cargoes at Moheshkhali Island in the Bay of Bengal, with options to discharge the cargo at either of the country’s two floating storage regasification units (FSRUs) located on Moheshkhali Island.

The RPGCL, a wholly owned subsidiary of state-run Bangladesh Oil, Gas, and Mineral Corporation, or Petrobangla, looks into LNG trades in Bangladesh.

The volume of each of the spot LNG cargoes will also be around 3.36 million British Thermal unit (MMBtu).

Bangladesh previously awarded its latest spot LNG cargo tender to TotalEnergies Gas and Power Ltd for May 10-11 delivery window at $12.68 per MMBtu.

It currently imports LNG from Qatar Energy and OQ Trading international under long term deals and purchases LNG also from spot market to re-gasify LNG in its two operational FSRUs having the total capacity of 1.10 billion cubic feet per day (Bcfd).

The country has been reeling an acute energy crisis as its natural gas output is depleting.

Bangladesh has been rationing gas supply to industries, power plants and other gas-guzzling industries to cope with the mounting demand.​

 

[Saif]

Gas price increase for industries unjustified, discriminatory

AN INCREASE of 33 per cent in prices of gas for use as raw materials and captive power in the industrial sector that the Energy Regulatory Commission announced on April 13 with an immediate effect is worrying for industries that plan to get new connections or expand their consumption. The plan...

www.newagebd.net

Gas price increase for industries unjustified, discriminatory
16 April, 2025, 00:00

AN INCREASE of 33 per cent in prices of gas for use as raw materials and captive power in the industrial sector that the Energy Regulatory Commission announced on April 13 with an immediate effect is worrying for industries that plan to get new connections or expand their consumption. The plan is discriminatory. The increase will force factories seeking to use gas for captive power generation to pay Tk 42 a unit in place of Tk 31.50. Old captive power producers seeking to use more gas to increase their present capacity would need to pay keeping to the new rates. The industries that would seek new connections would need to pay Tk 40 a unit instead of the previous Tk 30. The existing industries seeking to increase consumption would need to pay at the new rate for the additional supply. The industries in the process of getting new connections would need to pay for a half of the sanctioned limit at new rates and for the other half at the previous rate.

But for Petrobangla which proposed a 152 per cent increase in gas prices aimed at generating Tk 32.4 billion, all other stakeholders at the public hearing on February 26 expressed their strong disapproval, noting that the interim government was following in the footsteps of the Awami League government, which was overthrown in a mass uprising in August 2024 that flared up from protests against discrimination in civil service recruitment in July that year. The stakeholders who attended the hearing were surprised at the commission’s convening the public hearing on grounds of reducing deficits of public companies. Whilst the government remains unwilling to improve the efficiency of the agency and end corruption and irregularities in the process, industrialists have earlier noted that it appears something like resolving the issue by arbitrarily increasing prices. And, industrialists, who at the time of the public hearing said that such a government move would increase production costs that would eventually fall on consumers, add another reason to their argument against gas price increase, saying that the price increase for new and old industrial gas connections and for the use of gas for captive power would discourage fresh investments, especially at a time when the government is trying to attract investments. Businesspeople say that a profit-first mentality has driven the government move, but it benefits neither consumers nor industries.

The government should dispense with the discrimination in the gas price plan. But, it had better not increase gas prices at such a time and, first, put in some efforts to improve efficiency and end corruption in the agencies involved and the process before going for gas price increase.​

 

[Saif]

Titas Gas continues crackdown on illegal gas connections

Titas Gas Transmission and Distribution PLC continues its drive to identify and remove illegal gas connections. As part of a regular operation, a mobile court led by executive magistrate Milton Roy from the Energy and Mineral Resources Division conducted an eviction drive on Tuesday in the Jamgora

thefinancialexpress.com.bd

Titas Gas continues crackdown on illegal gas connections
Published :
Apr 16, 2025 22:49
Updated :
Apr 16, 2025 22:49

Titas Gas Transmission and Distribution PLC continues its drive to identify and remove illegal gas connections.

As part of a regular operation, a mobile court led by executive magistrate Milton Roy from the Energy and Mineral Resources Division conducted an eviction drive on Tuesday in the Jamgora and Itkhola areas of Ashulia, under the jurisdiction of the Jobio-Ashulia regional sales division of Titas Gas, Savar, UNB reports.

During the operation, around 500 illegal residential gas burners were disconnected, and 400 meters of pipeline were removed and seized.

According to Titas Gas officials, the initiative will save approximately 11,334 cubic feet/hour of gas.

Through mobile court proceedings, three commercial entities — Mokka Hotel & Chandpur Restaurant, Madina Hotel, and Gaibandha Hotel — along with two illegal consumers, Abdul Wahab Mir and Humayun, were fined a total of Tk 1.25 lakh, which was collected on the spot.

On the same day, another mobile court led by senior assistant commissioner and executive magistrate Nazmul Huda conducted a similar operation under the Jobio-Araihazar regional sales division of Titas Gas in areas including Kalibari Bazar, Satyabandi, and Duptara in Araihazar, Narayanganj, spanning 2.5 kilometers.

The operation resulted in the disconnection of around 820 illegal residential gas burners and the seizure of 110 feet of MS pipe, one package burner, and one booster. No fines or arrests could be made in the illegal factory found during the operation, as no responsible individuals were present at the scene.

Additionally, under the supervision of the regional revenue branch, Narayanganj, connection disconnection operations were carried out by five special teams in Hossain Nagar, Kashipur, and Fatulla areas of Narayanganj.

Due to unpaid gas bills, gas connections were disconnected in three households with six double burners.

For using gas in unauthorized extensions, 10 residential connections with a total of 99 double burners were disconnected. Furthermore, due to complete illegal usage without customer signal IDs, 10 illegal gas connections were disconnected, which included 33 double burners.

Titas Gas officials said that from September 2024 to April 15, 2025, a total of 29,617 illegal gas connections have been disconnected, including 230 industrial, 155 commercial, and 29,232 residential connections.

Additionally, 67,212 burners have been disconnected, and 144 kilometers of gas pipeline have been removed during this period.​

 

[Saif]

Gas price hike couldn't come at a worse time

The government's decision to raise gas prices for new industries by an average of 33 per cent, defying strong opposition from industrialists and business leaders, is being widely criticised for a multitude of reasons. First of all, the industrial gas tariff hike came amid the country's bleak invest

thefinancialexpress.com.bd

Gas price hike couldn't come at a worse time
Atiqul Kabir Tuhin
Published :
Apr 16, 2025 23:41
Updated :
Apr 16, 2025 23:41

The government's decision to raise gas prices for new industries by an average of 33 per cent, defying strong opposition from industrialists and business leaders, is being widely criticised for a multitude of reasons. First of all, the industrial gas tariff hike came amid the country's bleak investment scenario and macroeconomic vulnerability, and thereby, may put further damper on new investment.

Currently, several key economic indicators that reflect a country's investment scenario are on a downward trend. According to the latest data from Bangladesh Bank, private sector credit growth fell to a decade-low of 6.82 per cent in February, driven by declining loan demand from businesses. Another key indicator reflecting the investment climate is the import of capital machinery, which dropped by 30.10 per cent in the first eight months of fiscal year 2024-25 (July to February), compared to the same period last year. An investment slowdown, weak private credit growth, and reduced imports of capital machinery often go hand in hand.

Foreign direct investment has also experienced a sharp drop in the first half of the current fiscal year. In July-December period of FY2024-25, overseas investment fell by more than 71 per cent compared to the same period in the previous year.

These facts and figures make it amply clear that a red light is flashing on the country's investment dashboard. In this context, when investors are already unnerved by high interest rates, prolonged political uncertainty, and persistent high inflation, the increase in utility prices comes as yet another blow. The decision is feared to further dampen the already subdued investment climate, hinder industrial growth, impede job creation, and slow down economic recovery.

Then again, the new tariff is discriminatory. Introduction of a discriminatory tariff in the industrial sector by none other than a government that came to power riding on the back of an anti-discriminatory movement is the last thing one would have expected. But this is what has just happened.

As per the Sunday's announcement of the Bangladesh Energy Regulatory Commission (BERC), new industrial units will have to pay Tk 40 for per cubic metre of gas instead of Tk 30. Similarly, new captive power users will have to pay Tk 42 per cubic metre, which was previously Tk 31.5. The existing consumers will have to pay at the previous rate, but in the case of using gas beyond their sanctioned load, they will have to pay following the new tariff. Moreover, those who have received primary approval for new connections will have to pay new tariff if their usage exceeds 50 per cent of their sanctioned load.

As things stand, as per the BERC pricing structure, older factories, along with household, commercial users, and CNG filling stations, will continue to receive gas at previous rates, while new industrial units-as well as existing ones that decide to increase production-will have to pay significantly higher prices for this essential fuel. Business leaders rightly question the rationale behind applying different fuel rates for the production of similar goods within the same sector. Thanks to this discriminatory policy, new businesses will face significant challenges in competing with their established counterparts. Consequently, it will push new investors at the back foot and may even compel them to put their business expansion plan on hold as they will face added cost pressure and uneven competition.

The timing of the utility price hike is also being questioned, as it runs counter to the government's recent efforts to boost investment. It came at a time when the government is trying to rope in more foreign investors. Notably, the announcement was made just a few days after the conclusion of a major investment summit in Dhaka attended by over 500 foreign investors from around 50 countries. Many argue that it could potentially send a wrong signal to potential investors about the country's policy unpredictability.

The previous Awami League government, with the promise of providing uninterrupted supplies, had raised gas tariffs for small and cottage industries by 178.29 per cent to Tk 30 per cubic meter from Tk 10.78 in February 2024. Rates for captive power plants, small power plants and merchant power plants were raised by 87.50 per cent to Tk 30 per cubic meter from previous Tk 16. Despite this substantial price hike, the government failed to deliver the promised uninterrupted gas supply.

Bangladesh has witnessed a substantial hike in energy prices, apparently due to the policy failures of the previous government. Instead of prioritising the exploration of new gas fields, the government chose to import expensive LNG-allegedly to benefit certain cronies in the energy sector. To make matters worse, when LNG imports began in 2018, global gas prices were still at tolerable levels. However, the Russia-Ukraine war caused prices to surge worldwide. This, combined with exchange rate volatility and a persistent dollar crisis, has further aggravated the situation for Bangladesh.

Now, the pressing question is whether the current interim government will continue with the same flawed energy policies of its predecessor or chart a new course - one that would incorporate forward-looking strategies and prioritise the optimal utilisation of the country's onshore and offshore gas reserves.

Another critical challenge is the excessively high rate of system loss. At present, the technical loss rate of gas in Bangladesh stands at around 3 per cent-far above the international standard of 0.20 to 0.30 percent. Allegations have it that gas stolen through illegal connections is being passed off as technical loss. In just the first six months of the current fiscal year, 1.37 billion (137 crore) cubic meters of gas were lost due to system loss. With Petrobangla spending Tk 79.34 to import and supply each cubic meter of gas, the financial loss from this wastage amounts to Tk 108.7 billion. Reducing this excessive level of system loss could save the country billions. This is where the authorities should focus instead of burdening industries with steep tariff hikes that threatens future growth prospects.​

 

[Saif]

'Energy dominance agenda' and the catastrophic global warming

The new US 'reciprocal tariff' policy announced on April 2, 2025 has shaken the global trade systems and escalated tensions across the globe. It has been interpreted that the Trump administration wanted to increase US exports primarily to reduce the existing trade imbalances among the commodity exp

thefinancialexpress.com.bd

'Energy dominance agenda' and the catastrophic global warming
Mushfiqur Rahman
Published :
Apr 17, 2025 21:39
Updated :
Apr 17, 2025 21:39

The new US 'reciprocal tariff' policy announced on April 2, 2025 has shaken the global trade systems and escalated tensions across the globe. It has been interpreted that the Trump administration wanted to increase US exports primarily to reduce the existing trade imbalances among the commodity exporting countries and the USA.

The USA has been encouraging the increase of American export including the US energy export all over the world. Despite the sweeping package of imposed new tariff (President Trump's newly announced tariff has a minimum 10 per cent universal rate) on US imports, energy commodity imports received an exemption. Fossil fuel lobby groups in the USA had expressed their satisfaction and decided to welcome President Trumps' decision to exclude oil and natural gas from the new tariff. Within a short period of the President Trump's new import tariff policy announcement, globally fossil fuel prices started to decline (though the US new tariff policy would not apply directly to many oil and gas products). Demands for crude oil has been declining in the global market as the US exports increases and Chinese demands declining.

In the meantime, India and the USA have agreed to significantly increase the supply of oil and gas from the USA to the Indian market. At the end of the Indian Prime Minister Mr. Modi's US visit on February 14, 2025, it was stated that the US would be 'a leading supplier of crude oil and petroleum products and liquefied natural gas (LNG) to India'. Earlier international media reported that the Republic of Korea, the third largest LNG importing country of the world expressed its intention to buy more US oil and gas to reduce the existing trade surplus with the USA and improve energy security. Japan, the largest LNG importer of the world wanted to increase its LNG purchases from the USA to diversify its supply sources. Lorne Stockman, research director of the Oil Change International, a research and advocacy organisation for transition to clean energy suspected that the 'US seeks to either flood markets with cheap fossil fuels, or bully countries into buying more of its fossil fuels, or both.' It may be recalled that the USA is the largest oil and gas producer in the world. President Trump's 'drill, baby, drill' slogan is primarily aimed at ramping up fossil fuel extraction. AP report (February 15, 2025) suggests that the Trump administration announced the conditional export permission for a huge LNG project in Louisiana, USA (President Biden administration paused the project a year ago). President Trump has been encouraging for increased US energy productions, particularly fossil fuels and remove regulatory barriers that may slow down the increment. President Trump was delighted that the United States was blessed with 'liquid gold' and urged energy companies to sell more oil and gas to allies in Europe and around the world. As per published reports, President Trump stated 'we are going to make more money than anybody has ever made with energy.' He further explained, 'We're lucky to have it. I call it liquid gold under our feet. And we're going to utilise it.'

The shale fracking technological revolution helped the United States significantly increase natural gas and LNG productions in the mid-2000s. Natural gas productions in the USA surged dramatically and climbed 50 per cent from 2005 to 2015 and oil production doubled during 2009 to 2019. This production boom in the domestic market helped the Trump administration to promote 'energy dominance' agenda for the USA. The said agenda emphasised expanded fossil fuel production, deregulation and the use of US energy exports for 'economic strength and geopolitical leverage'. President Trump's 'energy dominance' strategy inadvertently would boost global oil and gas supply. Trump administration hopes that the USA's increased exports of oil and gas (and LNG) will reduce OPEC+'s groups bargaining power. It will help the USA 'to reshape global energy geopolitics and shifting US energy policy from dependency to strategic power.'

Trump administration has notified the United Nations of its withdrawal from the Paris Climate Agreement. 'The Guardian' reports (March 10, 2025) that Mr. Chris Wright, the US energy secretary stated that 'the Trump administration will end the Biden administration's irrational, quasi-religious policies on climate change that imposed endless sacrifices on our citizens.' He further stated that 'the Trump administration will treat climate change for what it is, global physical phenomenon that is a side-effect of building the modern world.' He added, 'everything in life involves trade off,'

Inevitable consequences of President Trump's energy dominance policy will be the weakening of the global efforts to 'transition away from carbon intensive energy'. Environmental rollbacks could delay the transition to clean energy solutions, net zero target achievements. Climate experts have been raising alarm that delaying actions to limit global warming would make the problem 'more dangerous and harder to solve'. If the world increases fossil fuel use including in the USA, the rate of global warming will move to the wrong direction. Already President Trump's 'drill, baby, drill' pledge is attracting other countries to reciprocate. As an example, Indonesia has hinted that it may follow the suit of the US administration policy. As reported by the news agency 'Antara', the Indonesian special envoy for climate change Mr. Hashim Djojohadikusumo raised question, 'if the United States does not want to comply with international agreement, why should a country like Indonesia comply with it?' It may be mentioned that the per capita production of carbon in Indonesia is three tons while in the USA it is 13 tons.

The energy dominance doctrine of the US administration may attract investment to increase fossil fuel energy and create job opportunity for Americans. However, it will further escalate climate change induced sufferings for the world, primarily for the most vulnerable nations.

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

 

[Saif]

BIDA sees gas tariff hike as 'discriminatory'

The investment promotion authority found the recent gas tariff hike as ‘discriminatory’ for new investors and apprehended that it would put an adverse impact on its ongoing efforts to attract new investment. The hike just after the investment summit would ‘undoubtedly’

thefinancialexpress.com.bd

BIDA sees gas tariff hike as 'discriminatory'
Doulot Akter Mala
Published :
Apr 17, 2025 08:50
Updated :
Apr 17, 2025 20:10

The investment promotion authority found the recent gas tariff hike as ‘discriminatory’ for new investors and apprehended that it would put an adverse impact on its ongoing efforts to attract new investment.

The hike just after the investment summit would ‘undoubtedly’ create a negative perception among the aspiring investors, said Bangladesh Investment Development Authority (BIDA) executive chairman in a letter to BERC.

The latest upward revision, on April 13, 2025, of gas prices by 33 per cent would put a higher tariff burden on the new investors compared to that of the existing one.

However, BIDA said it supported the government’s effort to cut subsidy but it should not be discriminatory.

“The government can consider trimming the subsidy uniformly,” BIDA Executive Chairman Chowdhury Ashiq Mohammad Bin Harun wrote in a letter sent to the Chairman of the Bangladesh Energy Regulatory Commission (BERC) on Tuesday.

In the letter, obtained by the FE, Mr Chowdhury found the necessity to review the gas tariff hike decision for the sake of new investment and keep economic mobility unhindered.

Talking to the FE, Energy Adviser Md Fouzul Kabir Khan said investors were queuing up with their investment proposals despite the gas tariff hike.

“Many investors are willing to make investment despite this gas price. So far, we have more than 300 investment proposals who have agreed to invest at this price,” he told the FE.

It’s BERC’s discretion to review it, but the government is not in a position to subsidise for an unlimited period, he said.

In the letter, the BIDA chair said the discriminatory policy on gas tariff would affect new investment and discourage country’s competitiveness.

“Investors have already taken stance against the decision,” he wrote.

BIDA thinks that this decision would hinder the Foreign Direct Investment (FDI) flow to Bangladesh, he added.

To attract investment, the Bangladesh Investment Summit-2025 was held from April 7 to 10 in the city.

A total of 450 investors from 40 countries participated in the summit.

“A number of investors have signed Memorandum of Understanding (MoU) and agreements with the BIDA showing their interest to invest in Bangladesh,” Mr Chowdhury wrote.

In the letter, Mr Chowdhury sought sincere cooperation of BERC to set an investment friendly gas tariff rate.

He suggested a review and impact analysis workshop to discuss the issue.

Talking to the FE on Wednesday, BERC chairman Jalal Ahmed said they were yet to officially receive the letter.

“We are open to discuss the issue in the commission and also with the Petrobangla that has put forward the proposal of gas tariff hike, if it creates any controversies,” he said.

The BERC chairman said the commission delayed the decision of gas tariff hike considering the investment summit.

Nahian Rahman Rochi, Head of Business Development of BIDA, said the BIDA chair put forward the proposal to review as differential tariff structure will dissuade new investors from entering the market.

“We are happy to organise a consultation to further discuss and pros and cons about it,” he said.

However, Mr Rochi urged the BERC to do review it within the fastest possible time.

“….and we need to ensure that the ultimate decision on rate is investment friendly,” he said.

Preferring anonymity, representative of one large foreign investor said the energy advisor have played smart, with this new concept, everyone is against rather discriminatory price between old and new, next move he will do is equalize old industry in to new industry to Tk 40 per cubic meter from today’s rate of Tk 30 cm.​