Category: Energy and Power

Thailand’s prime minister slammed recently oil traders for ‘excessive pro?teering’, blaming those stockpiling fuel or smuggling it abroad for shortages that have driven prices steadily higher. ‘Authorities have found cases of fuel stockpiling and smuggling for sale in neighboring countries,’ Prime Minister Anutin Charnvirakul said, adding the problem had cost the government 50 billion baht ($1.4 billion). ‘This action (smuggling and stockpiling) amounts to excessive pro?teering from rising oil prices during the global energy crisis,’ he said, calling it ‘a major factor behind the nationwide fuel shortages seen in recent weeks’.

evidence of hoarding and pro?teering among large and medium-sized oil traders had been found on land and at sea, he said

It needs no rocket science to understand the state of Bangladesh’s economy.

it’s not in good shape.

the common people have long been enduring the pinch of the deteriorating economy.

the cost of living has remained high with in?ation hovering around 9% for the past two years.

it all started before the US-Israel war on Iran with the spreading con?icts worsening the situation, not only in Bangladesh but globally. Bangladesh like many other countries is facing the headwinds both from domestic vulnerabilities and external factors, especially the latest outbreak of the Middle East war.

it has forced the newly elected government of Prime Minister Tarique Rahman to continue with tight monetary and ?scal policies. Not long ago Bangladesh’s economic growth drew special global attention. With the growth crossing 7 percent at one stage the growth was being seen as a model for economic development. Bangladesh, dismissed as a basket case at its birth ?ve decades ago, quali?ed to graduate from the LDC status by 2026 with all the necessary criteria necessary to ful?ll for the prestigious jump.

the BNP government has, however, requested for a deferment of the graduation citing lack of preparations stemming from domestic political changes and the adverse global condition.

the country’s struggling businesses have rather pressured the government to seek more time to reach the milestone in its development journey.

the issue is now on the table of the relevant UN organizations.

the country’s global lenders have already projected slower economic growth for ?scal 25-26.

the World Bank projects a GDP growth at 3.9%, down from its earlier projection of 4.6%.

the Asian Development Bank has lowered the growth to 4% from the earlier projection of 4.7%.

the growth projection from the International Monetary Fund has been slightly better at 4.7%, though it says it may dip to 4.3% in FY26-27.

the in?ation rate, according to IMF projection, may rise to 9.2%.

the projections re?ect the mood of local businesspeople. For the past few years the investment scenario has remained unsatisfactory.

the high interest rates have discouraged businesses from making any new investment.

at his latest meeting with a new batch of businesspeople the premier has stressed the need for developing the agriculture and agro industries. His call has been to focus on the northern region of the country.

it’s not because his home district Bogura sits in this region, but mainly the region offers to become a hub of agriculture and agro businesses. The region is already contributing towards the country’s agricultural growth. But mere new attention does not solve the problem. What is needed most is gas and electricity to power the growth the premier wants to achieve. The news from the power and gas sectors is not good.

the availability of gas from its reserves is declining. The US-Israel war on Iran has severely disrupted the supply chain of LPG and oil from the Middle East. Bangladesh’s dependence on imported LPG and oil has compounded its fragile energy security. We should not have pushed the country to such vulnerability. Wrong policies are to be blamed. We should have focused more on exploring our own natural gas resources instead of imported energy. Priority should have been given on solar energy. Policy should have been directed towards reducing the prices of the materials required for installing solar panels. Has it been right for us to ignore the environment-friendly extraction of our coal reserves? The summer season has already arrived amid concerns about energy shortage. Power outages are being forecast as the authorities are unable to produce enough electricity despite the higher capacity.

the rural towns and villages are reportedly ensuring load-shedding. With the Middle East crisis continuing despite a fragile truce we need to tackle the energy situation as if

Resident Representative, UNDP Bangladesh Stefan Liller has said unlocking new sources of climate ?nance is essential in Bangladesh, a country on the frontlines of climate change. The United Nations Development Programme (UNDP) and City Bank PLC signed a Memorandum of Understanding (MoU) recently to accelerate climate ?nance in Bangladesh by advancing the country’s emerging thematic bond market, with a focus on green investments. The signing ceremony took place at the City Bank head of?ce.

the MoU was signed by Stefan Liller, Resident Representative, UNDP Bangladesh and Mashrur Are?n, CEO of City Bank PLC, marking a signi?cant step toward mobilizing private sector investment for climate-resilient development, said UNDP.

Prime Minister Tarique Rahman recently held a marathon meeting with top businesses, focusing on improving the investment climate, resolving industry challenges and addressing the ongoing energy crisis. The meeting, held at the Prime Minister’s Of?ce in Tejgaon, continued for nearly three and a half hours.

after the meeting, Finance Minister Amir Khosru Mahmud Chowdhury told reporters that a wide range of issues related to trade, commerce and investment were discussed, with business leaders outlining key challenges and offering recommendations. ‘Problems and challenges facing the business sector were discussed, and ways to address them were explored. Business leaders shared their views,’ he said.

The Bangladesh government has announced a set of contingency action plans for immediate implementation to confront the ongoing energy crisis triggered by continued con?ict in Arab countries and the Persian Gulf region.

the primary objective is demand-side management through austerity in electricity and fuel use.

the stated target is to reduce daily electricity demand by 3,000 MW. This summer could see peak demand exceeding 18,000 MW.

even without the war, an increasingly import-dependent power supply system was not in a position to consistently generate 16,000 MW.

a de?cit of around 2,000 MW would likely have led to load-shedding during hot, humid summer days. Now, with the war pushing fuel prices sharply higher and disrupting supply chains, particularly due to constraints on shipping through the Strait of Hormuz, Bangladesh’s power system may struggle to consistently meet even 15,000 MW demand. Gas, LNG, coal, and liquid fuels are all becoming harder to procure on time and in suf?cient quantities.

under these circumstances, austerity and ef?cient consumption appear to be the only immediate tools available to limit load-shedding and ease pressure on fuel supplies for other sectors.

the government’s plan includes reducing of?ce hours for both public and private sectors to 9:00 am-4:00 pm, while banking hours will be shortened to 10:00 am-3:00 pm.

a major measure involves restricting shopping hours to 6:00 PM, later adjusted to 7:00 PM, except for businesses linked to food supply, pharmacies, and essential services. Fuel allocation for ministers will be cut by 30%, and the Ministry of Power, Energy and Mineral Resources has been instructed to reduce its expenditures by the same margin.

all overseas training programs for government of?cials will be suspended for three months, and even local training will be scaled back. Spending on meetings, workshops, and seminars will also be curtailed.

the government has further directed that no vehicles be imported using public funds for a speci?ed period.

educational institutions are expected to announce separate measures to reduce energy consumption.

there are also indications that electric buses are being imported to support public transportation. However, the overall austeritypackage requires careful scrutiny and coordinated implementation.

it remains unclear how extensively these measures were planned before being announced. For example, the initial decision to limit shopping hours to 6:00 pm did not work on the ?rst day, as shop owners had already announced an 8:00 pm closing time.

eventually, the government adjusted the limit to 7:00 pm. While reducing shopping hours can signi?cantly cut lighting and cooling demand during peak periods, such policies cannot succeed without proper coordination among stakeholders. Business owners, already facing multiple challenges, must be consulted before major changes to operating practices are enforced.

in many developed countries, retail outlets typically close by early evening, with extended hours only on speci?c days. Several countries across South Asia, Southeast Asia, Europe, and even Australia have adopted contingency measures to address energy crises. However, in Bangladesh, where major changes often face resistance, successful implementation requires inclusive planning and stakeholder engagement.

the most immediate impact of the war is being felt in the procurement and transportation of liquid fuels, including crude oil, diesel, LPG, and LNG. There are concerns that the Eastern Re?nery Limited may have to suspend operations due to a shortage of crude oil. Diesel shortages have already affected ?shing vessels, trawlers, and lighterage vessels transporting goods inland.

if the situation persists, road, river, and rail transportation could soon be disrupted.

the government is attempting to source crude oil, petroleum products, and LNG from alternative suppliers. However, higher prices and increased shipping and logistics costs are placing signi?cant strain on national ?nances.

the new government may not be able to sustain large subsidies for an extended period.

eventually, adjustments to fuel and electricity prices may become unavoidable, which could trigger broader in?ationary pressures across the economy.

in this context, the government must engage all stakeholders and consider declaring the energy crisis a national emergency to ensure coordinated action.

the proposal to introduce online classes for educational institutions also requires careful consideration. School students, particularly at the primary and secondary levels, already spend signi?cant time on electronic devices and bene?t greatly from in-person academic environments.

instead of a full shift to online learning, schools could be supported with incentives to arrange shared transportation, while limiting the use of private vehicles. Universities and colleges, on the other hand, may be better suited to adopt online classes.

adjustments to school hours and staggered weekly holidays could also help reduce peak electricity demand. Another critical area is the internal fuel supply chain.

the movement of fuel from depots to ?lling stations, and from stations to end-users, must be closely monitored to prevent disruptions. Strong administrative oversight is essential to ensure smooth distribution and to curb any irregularities.

at the same time, the media can play a constructive role by encouraging responsible consumption of fuel and electricity.

the government must also carefully assess any adjustments to fuel and electricity prices to ensure that such measures do not disproportionately fuel in?ation.

at the same time, longstanding priorities-such as accelerating domestic energy exploration and increasing the share of renewable energy-must not be overlooked. Reducing wastage, preventing pilferage, and improving ef?ciency across the energy system should remain central objectives.

on the supply side, Bangladesh needs to pursue proactive energy diplomacy to secure long-term governmentto-government agreements with countries such as Malaysia, Indonesia, Australia, and others, including those in the former Soviet region. Relying on expensive spot market purchases is not a sustainable strategy.

at the same time, the government should expedite the expansion of re?ning capacity, including upgrading the Eastern Re?nery and establishing a second re?nery. Developing strategic reserves of crude oil, petroleum products, LNG, and LPG-suf?cient for at least 45 to 60 days-should also be prioritized. Such reserves would provide critical ?exibility in managing supply shocks and stabilizing the domestic market during crises.

ultimately, the government must act with caution and clarity, ensuring that policy decisions do not create unnecessary panic among the public. Con?dence, coordination, and transparency will be key to navigating the current crisis while laying the groundwork for a more resilient energy system.

Bangladesh Bank has set new of?ce and transaction hours for all scheduled banks as part of nationwide efforts to conserve fuel and electricity.

according to a circular issued recently, bank of?ces will remain open from 10:00am to 5:00pm, while customer transactions will be conducted from 10:00am to 3:00pm from Sunday through Thursday until further notice. However, branches, sub branches, and booths located in seaport, land port, and airport areas, including port and customs zones, will continue to operate 24 hours a day, seven days a week, in line with existing directives.

The government recently hiked the prices of jet fuel for the second time within two weeks as a worsening global supply crisis puts pressure on prices.

the price of jet fuel for domestic travel has been hiked by Tk24.79 to Tk227.08 per liter, announced the Bangladesh Energy Regulatory Commission (BERC) in a noti?cation. The price of jet fuel for international ?ights has been hiked to $1.4806 from $1.3216.

earlier, on 24 March, the BERC had hiked the prices of jet fuel by 80% for domestic travel, and nearly 79% for international travel in the wake of the Iran war and related supply disruptions.

Russian Deputy Prime Minister Alexander Novak recently instructed the energy ministry to draft a resolution banning gasoline exports, the Russian government said.

the state-run TASS news agency earlier reported that the ban would remain in place until July 31. Novak said that turmoil in the global oil and oil products market, caused by the crisis in the Middle East, is leading to signi?cant price ?uctuations.

at the same time, the high demand for Russian energy resources in foreign markets remains a positive factor, he added. Crude oil processing volumes remain at last year’s level, ensuring a stable supply of oil products, the government said in a statement. Several regions in Russia and parts of Ukraine under Russian control were reporting gasoline shortages last year after Ukraine stepped up attacks on Russian oil re?neries and amid a seasonal surge in fuel demand

The Power Division has prioritized the energy sector as a key focus area as it moves to meet the country’s rising electricity demand in summer amid growing global uncertainties.

the country currently has a total installed power generation capacity of 32,332 MW, including 28,919 MW from grid-based sources, while daily demand stands at around 14,50015,000 MW, according to an of?cial document. However, as the sweltering heat of summer approaches, the stability of the national grid faces a complex set of challenges. Despite having suf?cient capacity to meet existing demand, the national grid is expected to come under pressure during the peak summer months, when consumption surges and localized outages become more frequent. These disruptions are largely driven by maintenance requirements, storm damage, and infrastructure limitations in the transmission and distribution networks

Finance Minister Amir Khosru Mahmud Chowdhury recently said that Bangladesh would work with the Asian Infrastructure Investment Bank (AIIB) to address the ongoing energy crisis and support future development priorities. He revealed this while talking to reporters outside the Prime Minister’s Of?ce (PMO) in the city’s Tejgaon area following a meeting held between Prime Minister Tarique Rahman and an AIIB delegation there. The ?nance minister said discussions were held on how Bangladesh will collaborate with AIIB, particularly in the context of the current global and domestic energy crisis, which is creating pressure not only on Bangladesh but on economies worldwide.

to tackle this pressure, Chowdhury said, talks were also held on budget support, and AIIB has agreed to provide budget support to Bangladesh.