Govt turns to CNG rationing, oil-fired power to save gas for industries
In a dual approach to free up industrial supply, the government also plans to clear outstanding dues owed to diesel- and furnace oil-fired power plants.
The government has decided to restrict gas supplies to CNG stations to specific time slots in a bid to increase availability for industries grappling with production disruptions amid an ongoing gas crisis.
In a dual approach to free up industrial supply, the government also plans to clear outstanding dues owed to diesel- and furnace oil-fired power plants. This is expected to enable these units to generate an additional 2,500MW, saving roughly 500 million cubic feet per day (mmcfd) of gas for factory operations.
Furthermore, the government will allow private entrepreneurs to transport gas from the Bhola field to Dhaka via CNG-truck networks.
The decisions were taken during recent high-level meetings chaired by Prime Minister Tarique Rahman, officials from the Energy Division and finance ministry told The Business Standard. The prime minister is reviewing the energy situation nearly every day, evaluating alternative solutions and issuing direct instructions to tackle the shortfall.
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Monir Chowdhury, joint secretary and spokesman for the Energy Division, confirmed that the ministry is implementing the PM's directives on a priority basis.
While gas supply dropped to 2,100mmcfd in recent days, it improved slightly to 2,400mmcfd on Tuesday. Power plants currently consume around 1,000mmcfd, captive generators use 500mmcfd, and the remaining output is shared among industries, commercial entities, and households.
Scheduled supply, transport CNG from Bhola
According to the "note of discussion" of a meeting with private-sector entrepreneurs on 1 August, the PM took two decisions in response to requests from businesses.
The note said, "The issue of dividing the gas supply time (scheduled window) from CNG gas stations for industrial and commercial purposes will be considered to address the gas crisis. It has been decided to provide necessary approval if private-sector entrepreneurs want to transport gas extracted from the Bhola gas field by truck."
Energy officials said Tarique also decided to install a pipeline to bring Bhola gas into the national grid. The pipeline is expected to cost Tk500 crore and take about two years to build.
Against this backdrop, the government has decided to keep open the option for businesses to transport gas by truck so that supplies to industries can be increased more quickly.
Energy Division officials said they had not yet received any proposal from the private sector to convert gas from the Bhola field into CNG and transport it by truck for industrial use.
Asked whether businesses were interested, BGMEA President Mahmud Hasan Khan said the issue had also been discussed during the previous Awami League and interim governments. "However, businesses hadn't shown interest because the proposal was considered unviable."
Rationing supply to CNG stations
The Energy Division is reviewing a proposal to ration gas supplied to CNG stations, officials said, adding that increasing supplies to industries over transport is a government priority.
However, they said the ministry needed to consider the matter further before implementing any rationing. The ministry is assessing the possible impact of reducing gas supplies to CNG stations or suspending supplies for specific periods.
Clearing Tk8,000cr dues to unclog supplies
The government has decided to maximise generation from coal-fired power plants and operate furnace oil-fired plants to save gas used for power generation. Although the move will increase government subsidies, it is aimed at freeing up gas for industrial use.
BGMEA President Mahmud Hasan Khan said they had proposed that the government generate 3,000MW of electricity from oil-fired plants instead of gas-fired plants. This would save 600mmcfd of gas, which could then be supplied to industries and ease the crisis.
The proposal includes paying Tk8,000 crore out of around Tk14,000 crore in outstanding dues owed to private power companies.
Finance ministry officials said the Prime Minister's Office had instructed the authorities to clear outstanding bills owed to private furnace oil-fired power plants.
Bangladesh's furnace oil-fired power plants have a combined daily generation capacity of around 6,000MW, but are currently producing only about 2,000MW.
David Hasnat, president of the Bangladesh Independent Power Producers Association, said most of these plants remain shut as the government has not paid their bills for 6-7 months.
"Their owners have had to borrow money from other companies within their groups to repay banks," he told TBS. "We have proposed that the government pay the outstanding bills while retaining 45 days' worth of dues."
He said the payment of dues would allow us to repay banks, import furnace oil, and restart the power plants. "Depending on the amount the government pays us, we can generate additional electricity and supply it to the national grid."
Hasnat added, "Even if we can generate an additional 2,500MW, the government would save 500mmcfd of gas. If that gas is supplied to industries, the crisis would ease. The government has told us that payments will be made to restart the furnace oil-fired power plants."
