Asifur Rahman

Bangladesh is mostly relying on imports for urea as gas shortage has brought local fertiliser production to a near halt, in a development that will cost the country dearly in terms of foreign currency reserves and food inflation.

Though the electricity demand has dropped with the onset of monsoon, the Bangladesh Power Development Board (PDB) is struggling to supply adequate power due to a shortage of gas and other fuel supply and maintenance works.

A two-week-long gas crisis has been affecting homes, factories, and vehicles that run on compressed natural gas, thanks to a dip in supply following the shutdown of an LNG regasification terminal in Cox’s Bazar on May 29.

The revised gross forex reserves target for the current fiscal year ending on June 30 was $29.1 billion. It stood at $24.23 billion on June 5, according to the traditional calculation of the Bangladesh Bank. To meet the goal, another $4.87 billion will have to be added to the reserves by this month.

In Bangladesh, the power generation capacity increased to 30,277 megawatts in 2023-24 from 4,942 MW in 2009, said Finance Minister Abul Hassan Mahmood Ali in his budget speech.

More than a third of the subsidies allocated in the new budget is for the power sector due to what experts say is the huge spending on capacity charges.

They blame govt for focusing on imported solutions rather than own resources

The government will rely more on domestic bank borrowing than foreign financing in the next fiscal year, intensifying pressure on the economy.

With an aim to restore macroeconomic stability, reduce inflation, and contain pressure on foreign currency reserves, Finance Minister Abul Hassan Mahmood Ali is going to place a Tk 7,96,900 crore budget for the 2024-25 fiscal year tomorrow.

The subsidies and incentive expenditures in the upcoming budget are going to be more than that of the current fiscal year.

The vehicles consume only 2.5pc of total power capacity, it says

As the government wants to lower expenses, it is likely to contain the budget deficit to 4.6 percent of gross domestic product in the next fiscal year, a level seen a decade ago.

Power generation companies, including rental ones, may see an end to a zero-duty benefit on their import of machinery, equipment and spare parts from next fiscal year as the government moves towards generating more revenue curtailing the practice of handing out tax exemptions.

The government is set to increase budget allocation for quick completion of the Rooppur nuclear and Matarbari coal-fired power plant projects.

Bangladesh can reduce its liquefied natural gas (LNG) imports by 21 percent and save $460 million a year by replacing ageing, inefficient industrial captive power generators with more efficient models and harnessing the waste heat produced by generators for other applications, says a study.

Analysing data from 73 gas-fired captive generators at 51 industries with a combined capacity of around 250 megawatts (MW), the IEEFA said the average efficiency of these generators is only 35.38 percent

Amid the crisis of dollars, the next Annual Development Programme will have a record Tk 1 lakh crore allocation from foreign funds.

The Finance Division last week disbursed Tk 1,500 crore in subsidy against the power ministry’s demand for the immediate release of Tk 3,000 crore to boost electricity supply during the summer months.

The global liquefied natural gas supply capacity will increase drastically in future and the prices will stay low, but Bangladesh is not likely to reap the benefit due to fiscal challenges, according to a global report.

Hundreds of thousands of people in the rural areas have been subjected to hours of power outage despite record-setting generation of electricity over the last few days.